JOHANNESBURG (Reuters) - The chief executive of South Africa’s Massmart Holdings Ltd (MSMJ.J) will quit later this year, leaving the unit of Wal-Mart Stores Inc (WMT.N) in the midst of a problematic expansion across Africa and growing competition at home.
Chief Executive Grant Pattison, who oversaw seven years of steady growth and engineered the sale of a majority stake to Wal-Mart, the world’s biggest retailer, will be replaced by his deputy, Chief Operating Officer (COO) Guy Hayward, from June 1, the company said on Friday.
“It’s a bit of a surprise that he is stepping down because he’s young, but it’s also understandable that he’d be looking for a new challenge after seven years at the helm and ‘burn out’ could be around the corner,” said Jean Pierre Verster, a fund manager at Johannesburg-based 360ne Asset Management.
“I do think that the handover to Guy is seamless. He’s been with the company for a number of years ... so there are safe hands in terms of succession planning.”
Hayward, a chartered accountant, inherits the company as it faces tough competition at home and as it rolls out its grocery business to take on industry leaders Shoprite Holdings (SHPJ.J) and Pick n Pay Stores (PIKJ.J).
He is expected to continue with the company’s African expansion strategy, which has been slow due to a shortage of the sort of prime retail space which it favors in lucrative markets such as Nigeria.
Massmart founder and Chairman Mark Lamberti will also step down as of April 10, a move which analysts anticipated after Lamberti was recently appointed chief executive of logistics firm Imperial Holdings (IPLJ.J). He will be replaced by mining and investment executive Kuseni Dlamini.
Pattison gave no reason for his departure but said: “The group is in good shape and well positioned for growth and I can think of no better time to hand over the reins.” Massmart said he had resigned and would not get any payoff.
Hayward could not be reached for comment.
One analyst, who declined to be named, said Hayward might lack the right retail experience for the job. “He is a financial chap. He spent years as CFO (chief financial officer) before he became COO a couple of years ago. He’s not a retailer. You need people like (Shoprite CEO Whitey) Basson or Pick n Pay’s (CEO Richard) Brasher,” the analyst said.
Hayward, who held the CFO position for more than a decade since 2001 before being appointed COO in 2012, previously worked at investment bank Goldman Sachs Group Inc (GS.N) in London.
Shares in Massmart fell as much as 3.3 percent and by 1026 GMT (6.26 a.m. EDT) were down 2.5 percent at 134.50 rand, lagging a 1 percent fall in the JSE All-share index .JALSH.
Pattison, who will remain on the board as a non-executive director, is best known for steering through the sale of a 53 percent in Massmart to Wal-Mart in 2011, a high-profile deal seen as a vote of confidence in the retail potential in Africa’s most developed economy.
However, it also sparked months of wrangling with labor unions and South Africa’s government over conditions, including the use of local suppliers.
Editing by Joe Brock and David Holmes