Bloomberg News

Dixons Slides as CEO Browett Leaves for Apple Post: London Mover

February 01, 2012

Jan. 31 (Bloomberg) -- Dixons Retail Plc, the largest U.K. consumer-electronics retailer, fell the most in more than seven months in London trading after the company said Chief Executive Officer John Browett is leaving to join Apple Inc.

The stock declined as much as 13 percent to 13.25 pence, the steepest drop since June 9, snapping a six-day rally.

The surprise departure of 48-year-old Browett is “a blow to Dixons,” according to Caroline Gulliver, an analyst at Execution Noble Ltd. The CEO has overseen a shift toward more service-oriented, online retailing since joining from Tesco Plc about four years ago. Dixons this month reported improved profitability in the U.K. over the Christmas period.

Browett will be succeeded next month by group operations director Sebastian James, the owner of the PC World and Currys chains said today. Also gaining promotion to the board is Katie Bickerstaffe, who has worked alongside James since 2008 and will become head of operations in the U.K. and Ireland.

“It sounds like it will be business as usual,” said Gulliver, who has a “neutral” recommendation on Dixons.

Dixons said today that business is “in line” with the patterns reported in its sales update on Jan. 17.

The shares were down 4.5 percent at 14.55 pence as of 9:36 a.m., trimming the gain this year to 48 percent.

“Short-term, it’s not good news,” said David Jeary, an analyst at Investec Securities with a “hold” recommendation on Dixons stock. Browett “was the architect of the renewal plan and the figurehead mouthpiece,” though the appointment of James “provides very strong continuity.”

CEO Pay

James, 45, will be promoted to the Dixons board and succeed Browett as CEO on Feb. 20, the company said. He joined in April 2008 from Synergy Insurance Services Ltd. and his previous roles include strategy director at U.K. retailer Mothercare Plc.

In his new role, James will earn 600,000 pounds ($945,540) a year, plus annual bonus and benefits, Dixons said. Last year, Browett received basic salary and fees of 676,000 pounds and was paid 1.03 million pounds overall including pension contributions and a 122,000-pound cash bonus in the 12 months through April.

Browett “has done a good job of turning Dixons around in the face of an extremely difficult macro-environment and seen off a competitive threat from Best Buy,” Gulliver said.

Best Buy Inc. decided to exit the U.K. in November after opening 11 stores, while rival Comet, owned by Kesa Electricals Plc, has been sold to private equity firm OpCapita LLP.

--Editors: Paul Jarvis, Robert Valpuesta.

To contact the reporter on this story: Sarah Shannon in London at sshannon4@bloomberg.net.

To contact the editor responsible for this story: Sara Marley at smarley1@bloomberg.net


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