Profile: Richard Pennycook – confirmed as Co-operative Group chief executive

After six months in the interim chief executive role, the Co-operative Group board has confirmed Richard Pennycook as its permanent chief. The former financial director for Morrisons supermarket...

After six months in the interim chief executive role, the Co-operative Group board has confirmed Richard Pennycook as its permanent chief.

The former financial director for Morrisons supermarket was appointed into the same post during the Group’s financial crisis last June, and later as chief operating officer. He replaced Euan Sutherland in March, who quit the Group amid a sustained campaign of media leaks from the organisation.

Retail Week has described Mr Pennycook as an expert in “turnarounds and management buyouts”. He helped embed Morrison’s acquisition of Safeway. He told the publication last year: “It was such a big organisation. Morrisons had 40,000 staff and Safeway had 80,000, and it was in deep trouble.”

Mr Pennycook is also a fellow and current director on the board of the Institute For Turnaround. When he was appointed interim chief executive, Mr Pennycook said: “For me, there are always two things that are very rewarding about a successful turnaround.

“The first is the response of the people in the business – the vast majority of whom will be good people with a strong desire for the business to succeed. All they need is clear leadership and a good plan. The second great thing about a successful turnaround is proving the doubters wrong!”

Ursula Lidbetter, chair of the Group, said: “The Co-operative Group needs strong, talented, committed leadership as it starts on the next phase of its recovery and I am delighted that Richard has accepted the role of Group chief executive.”

Ms Lidbetter said that following the Group’s governance changes, the board decided to “act with speed” in the interest of the Group and its people. “We have seen the first-class job that Richard has done over the last six months, in challenging circumstances, leading a strong executive team,” added Ms Lidbetter. “He has a commitment to co-operative values and principles and has built a strong rapport with our members. We are clear that he is the right person to continue the process of rebuilding the Group.”

He has also led a recovery situation at motoring organisation RAC between 2003-2005 and the Welcome Break Group from 1998-2002 – and served the latter two years as chief executive. His consumer experience also includes finance roles at cider maker HP Bulmer, pub chain Wetherspoons and fashion and homeware business Laura Ashley.

Mr Pennycook, aged 50 and who holds a degree in Economics and Accounting from Bristol University, was also involved in the turnaround of former department store chain Allders. There he learned the most about negotiations with the banking industry, which he has been leading for the Co-operative Group over the past six months.

Allders failed as a business with the start of recession in the early 1990s, according to an interview with Mr Pennycook in CFO World. He said: “We had expected to refinance the business within 12 months to do a sale and leaseback of department stores and pay down debt. In fact the property market fell apart, there was no way this financing was going to take place and as a result we had to go into a complete renegotiation with the banks.”

The organisation had to negotiate with 23 banks and 25 equity holders. “Sorting that out – it took 18 months – was just fantastic experience. I learnt so much in that 18 months and made contacts that I have still got,” he told CFO World.

On his appointment as Group chief, he said: “I am delighted to have the chance to lead the Co-operative Group through the crucial job of rebuilding the business. We have taken major steps forward over the last six months, securing governance reform and repairing our balance sheet, but we have much to do to return the Group to full financial health and improve the performance of our businesses.

“I lead a talented executive team that has started this vital process and together we will continue our work to restore the Group to its rightful place at the heart of communities. With our members’ continued help and the ongoing support of our customers and colleagues, I am confident that the Co-operative Group has a strong and exciting future ahead of it.”

Mr Pennycook is currently chair of online retailer The Hut Group, independent director of home-builder Persimmon Plc and a non-executive director of joinery company Howdens.

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