December 19, 2012 / 10:38 AM / in 5 years

UPDATE 1-Kingfisher loses its heir apparent to Co-op

* COO Sutherland surprises market with move to Co-op helm

* Kingfisher profits lower in Q3

* Shares flat

LONDON, Dec 19 (Reuters) - European home improvement retailer Kingfisher lost its heir apparent on Wednesday with the resignation of chief operating officer Euan Sutherland.

Sutherland, considered a likely candidate to succeed Kingfisher’s chief executive Ian Cheshire, will instead become chief executive at supermarket and banking conglomerate the Co-operative Group next May.

News that Sutherland is already packing his bags after promotion from running Kingfisher’s market-leading B&Q high street business in February was a surprise, said independent retail analyst Nick Bubb.

“Kingfisher’s ‘Creating the Leader’ strategy was about exploiting the benefits of DIY market leadership, but it was also about creating the internal successor to CEO Ian Cheshire,” he said.

“ will regroup and reorganise from within, but Euan’s departure is a blow,” Bubb added.

Sutherland has worked at several major retailers during his career, including chemist chain Alliance Boots and electricals group Dixons, as well as drinks group Coca-Cola.

UK sales at Kingfisher were hit by extremely wet summer weather in 2012, while the decline in the euro has depressed profits in France, its largest market.

In November, the company said uncertainty over government budget plans had knocked quarterly profits at its French operations down 6 percent.

Brokerage Seymour Pierce reiterated its gloomy outlook for Kingfisher on Wednesday.

“ was, in our view, a major contributory factor in the recovery of the UK business over the last five years,” said Seymour Pierce analyst Freddie George.

“As a result of the weakening trend, we believe management will be under pressure to consider a share buyback or special dividend.”

Shares in Kingfisher were little changed following the announcement, down 0.5 percent at 276 pence, slightly underperforming the FTSE 100.

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