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UPDATE 1-Delhaize seeks new CEO as long-serving boss heads out
May 8, 2013 / 10:51 AM / 4 years ago

UPDATE 1-Delhaize seeks new CEO as long-serving boss heads out

* Pierre-Olivier Beckers became CEO in 1999

* Oversaw group integration, deals in U.S. and Balkans

* Cut costs, invested to tackle tough U.S. market

* Shares lagged European sector under his tenure

By Robert-Jan Bartunek

BRUSSELS, May 8 (Reuters) - Belgian grocer Delhaize is looking for a new chief executive after its boss of 14 years, who brought together a loose grouping of businesses and built them up in the United States and eastern Europe, said he was stepping down.

Pierre-Olivier Beckers, 53, said on Wednesday he would stay on as a director and would remain as chief executive until an internal or external candidate took over from him.

He did not specify his reasons for leaving or his long-term plans, and is the latest head of a global company in his 50s to quit in a matter of days, after Peter Voser’s decision to step down from the helm of oil company Royal Dutch Shell and Paul Walsh’s exit from spirits group Diageo.

“When he became CEO, Delhaize was a holding rather than an integrated group,” KBC analyst Pascale Weber said of Beckers.

“There used to be no synergies between all the different supermarkets, and that has completely changed now.”

Beckers’ struck his biggest deal at Delhaize within months of taking charge, buying upmarket U.S. chain Hannaford for $3.6 billion to cement the company’s position as a force in food retailing along the country’s east coast.

But Delhaize’s strength in the United States, which accounted for about 65 percent of its 2012 revenues of 22.7 billion euros ($29.7 billion), has been a mixed blessing, as a squeeze on consumer incomes and cut-throat competition has hit the U.S. industry hard in recent years.

That has led Beckers to cut costs and spearhead a major refurbishment programme at its largest U.S. chain, Food Lion. In March, the group said it would cut its dividend this year to help fund its investments.

But there are signs the strategy is starting to bear fruit.

Last month, Delhaize posted a rise in operating profit for the first time in six quarters and it said on Wednesday first-quarter sales at revamped Food Lion stores continued to outperform those not yet refurbished.

Amid tough trading in the United States and at home, where Delhaize competes with discounter Colruyt and France’s Carrefour, Beckers expanded Delhaize’s presence in emerging European markets, while also shedding units in the Czech Republic, Slovakia and Thailand.

In 2011 the company bought Serbian retailer Delta Maxi, which has operations across southeastern Europe and the Balkans, for about 930 million euros.

Shares in Delhaize, which now has about 3,400 stores worldwide, have fallen around a third in value under Beckers’ stewardship, underperforming the STOXX Europe 600 retail index by about 25 percent, according to Reuters data.

But they have outperformed Dutch rival Ahold - which also makes most of its sales in the United States - by more than a third over the same period.

At 1035 GMT, Delhaize shares were up 3.4 percent at 49.785 euros.

“While shares are up, I don’t think Beckers’ departure is a reason to celebrate,” said ABN Amro analyst Robert-Jan Vos.

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