Who is Asda’s chair and why does he want Mohsin Issa to step away?
Depending on your age and your attention span towards the in and outs of the UK retail scene, you may or may not have heard of Lord Stuart Rose.
Knighted in 2008 for his services to the retail industry, he has spent twenty years running some of the biggest names in UK retail: Argos, Marks & Spencer, Ocado and most recently Asda.
He has been chairman of Asda since 2021, and has presided over a tricky few years at the retailer.
After being bought out by TDR Capital and the Issa brothers in 2021, the grocer’s share of the market has been eaten into by competitors Tesco, Sainsburys, Aldi and Lidl.
The 75-year old has been credited with a life-saving makeover of M&S. In January 2007, he was named the “2006 Business Leader of the Year” by the World Leadership Forum for his efforts in restoring the fortunes of Marks & Spencer.
Now, Asda is currently in the midst of a similarly ambitious turnaround plan to take the supermarket back to its affordable, efficient roots.
Rose and Issa
It remains to be seen whether Asda can pull off its turnaround and get shoppers back into stores, but it is clear that Lord Rose doesn’t really want Mohsin Issa to be a part of it.
Mohsin and his brother Zuber – together with TDR capital – bought Asda in 2021 in a debt-fulled takeover. The duo are known for aggressive bids for companies funded by loans.
Rose has said Mohsin Issa should step away from the daily running of Asda as the supermarket aims to revive its performance.
Asda has been looking for a new CEO since 2021 – the position has been empty since 2021 after the then-CEO left over a strategic disagreement, and filled, on an interim basis, by Mohsin.
“I wouldn’t encourage him to [intervene in operations], and I am the chairman,” Lord Rose told the Telegraph.
“We need a full-time fully experienced retail executive to come in… we always said Mohsin was a particular horse for a particular course.
“He is a disrupter, an entrepreneur, he is an agitator. We’ve added a significant number of stores and we’ve changed a lot, but it now needs a different animal. In the nicest possible way, Mohsin’s work is largely complete,” Rose added.
Attempts to find a new leader in 2022 were unsuccessful, with Issa’s involvement and hands-on approach thought to be an obstacle.
The company has said it is “undertaking an extensive international executive search to find a permanent CEO”.
Issa and Issa
By all accounts, Mohsin and Zuber have a different approach to business: Mohsin is viewed as a restless dealmaker, while Zuber reportedly has a more measured demeanour.
They have been, according to Bloomberg, been moving in somewhat different directions as of late – best evidenced by Zuber’s decision to sell his shares in Asda to TDR capital.
The brothers began to split their business interests in Asda earlier this year, and Mohsin took a larger role in the day-to-day running of the grocer while Zuber acquired EG Group’s remaining UK forecourt business and certain foodservice locations.
Their sprawling empire has started to wobble a little. The combined value of their EG Group and Asda stakes has fallen by almost 60 per cent since the end of 2021, and is now worth about £2.03bn as of March this year, according to the Bloomberg Billionaires Index.
They have maintained that they are very close despite the separation of business interests in Asda.
A smooth separation of interests will be key for the struggling grocer, as well as – if Rose is correct – a timely handover of the reins to a new CEO.
The brothers, and Lord Rose, both face tough challenges ahead, with a behemoth business at stake.