Having recently gained headlines for his shock move from Marks and Spencer’s to Tesco, there is no denying that Alan Stewart is a CFO very much in demand. His ability to dramatically cut expenditure prompted analyst Caroline Gulliver to name him a “cost-cutting supremo.” In these times there is certainly a demand from Britain’s biggest retailers for such a character.
It was arguably Stewart’s role as group finance director of high street store WH Smith that first marked him as a big name in retail finance. Alongside former chief, Kate Swann, Stewart was accredited with doubling the pre-tax profits of the stationary store. Whilst at WH Smith he helped implement a number of innovative cost saving strategies (such as rerouting delivery vans and putting timers on fridges) in a bid to cut overheads and increase profit margins.
Born in South Africa, he began his career as an accountant with Deloitte in Cape Town and then went on to work for HSBC as an investment banker. The financial skills he picked up allowed him to rise through the ranks at Thomas Cook; where he left the company as chief executive in 2005 after joining them in 1998. As with WH Smith his time at the travel agent was also characterised by reduction in costs: poor trading conditions meant that he was forced to oversee a number of dramatic cuts, including a 50 per cent decrease in planned capital expenditure and a loss of 2,600 jobs.
Despite a strong track record, Stewart has failed to alter the dwindling fortunes of Marks and Spencer’s. Just last week the company announced its 12th consecutive fall in non-food sales. Tesco however appear to be confident in their decision. Philip Clarke, chief executive officer, said: “When we set out on this search we wanted a candidate who had the right blend of experience, leadership and values to play a leading role in the transformation of Tesco. We have found all three in Alan.”
With Stewart being offered a £200,000 pay rise and a ‘golden hello’ in the form of shares to the value of £1.7m, it appears that the world’s third largest retailer is pinning a lot of hope on their new CFO. Recent buying trends have seen savvy shoppers snub the British favourite in favour of German budget supermarkets such as Lidl and Aldi resulting in a 1.9 per cent drop in its UK market share. Analyst Kate Calvert noted: “His reputation is very much built on generating cost efficiencies, something a company the size of Tesco definitely needs at the moment. The question is whether he is strong enough to take on the existing Tesco culture, only time can tell.”