Sainsbury boss King to quit, plays down M&S talk - UPDATE

29th Jan 2014 09:07

The Chief Executive of Sainsbury's is stepping down but played down talk that he could replace the boss of troubled rival Marks & Spencer.Justin King will quit the role on July 9th this year to be succeeded by Group Commercial Director Mike Coupe, the group said in a statement.There had been speculation that King was considering leaving. In April last year, the chain dismissed reports that he could replace Bernie Ecclestone as the boss of motor racing's Formula One.There has also been talk he could replace M&S Chief Executive Marc Bolland, who has faced criticism for failing to revive its clothing sales.King, 52, declined to comment on his plans, but said he had a non-compete clause in his contract which prevents him joining big rival grocers including M&S for a year after he leaves Sainsbury's."I think speculation about what I want to do in the future is for another time," he told journalists on a conference call. But he added: "I'm still a relatively young man and I'm sure the right opportunity will come along and I'll know it when I see it. There's still plenty of energy left in the old dog yet."Sainsbury's said King would not receive a bonus or deferred shares for 2014/15 and had offered to waive a cash severance payment of up to 175% of his salary, potentially worth up to £1.7m.But he would remain eligible for consideration for payment of an annual bonus and deferred share award for 2013/14, subject to performance. Coupe will receive an annual salary of £900,000, with a potential annual bonus and deferred share award each of up to 110% of salary plus other benefits.He started his career at consumer goods group Unilever and joined Sainsbury's in 2004 after spells as managing director of frozen food chain Iceland and in senior management at Asda and Tesco.Coupe told journalists on the call it would be "business as usual" under his leadership but said he may make changes to keep the group in line with changing market dynamics.He said the company was trading in the most challenging markets it had seen but it would continue to invest in growth areas."I think the story is very much one of continuity," Coupe said.Phil Dorrell, Director of retail consultancy Retail Remedy, said markets will closely monitor Coupe's performance in the second half of 2014."Mike Coupe needs to make his own mark, but in the early days he should simply ride out the momentum provided by King," he said."If it ain't broke, don't fix it - and right now Sainsbury's is by no means broke. For Mike Coupe, in the near term at least, consistency is key."King is widely regarded as having revived the chain's fortunes in his decade in charge, outperforming rivals such as Tesco and Morrisons.The group's latest trading update showed Sainsbury's had a record Christmas, with total sales up 2.7% in the 14 weeks to January 4.King said: "This was not an easy decision for me to make. It has been a privilege to have led the company for the past 10 years and I'm incredibly proud of our achievements. I am confident that under Mike's leadership the business will go from strength to strength."Shares fell 2.1% to 349.2p at 10.55 in London.PW