X5 Retail Group NV (FIVE), Russia’s largest food retailer by revenue, proposed Stephan DuCharme become chief executive officer as three other executives depart.
Chief Financial Officer Kieran Balfe will resign as of March 8 and be replaced by Sergey Piven, pending shareholder approval at a meeting in April, X5 also said. Frank Mros, head of so-called soft discounters, and human-resources director Tatiana Kozhevnikova will resign, the company said.
“We view this turmoil in management as a sign of despair,” said Ivan Kushch, an analyst at VTB Capital in Moscow. “Appointment of DuCharme on the permanent basis is also bad for the company as he used to be a board member and lacks executive experience in retail.”
X5, controlled by Russian billionaire Mikhail Fridman’s Alfa Group, has slid 29 percent in the last 12 months as growth slowed. The company’s revenue advanced 8.3 percent last year while rival OAO Magnit posted 34 percent sales growth. Magnit (MGNT) has doubled its market value since December 2011. X5 shares fell as much as 4.9 percent in London today.
“The appointment of DuCharme, who has been acting CEO since July, shows that X5 didn’t have much of a choice,” said Mikhail Terentiev, an analyst at Otkritie Capital in Moscow. “Still, it’s mildly positive that X5 finally got a permanent CEO after not having one for half a year.”
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