Woolworths has named Richard North, the ousted chief executive of InterContinental Hotels, to succeed Gerald Corbett, who yesterday resigned as chairman of the struggling high street retailer.

Mr Corbett will step down at Woolworths’ annual meeting on June 6 after six years at the helm, during which time the group’s stores have suffered sliding sales in the face of fierce competition from the super-markets and online retailers.

Woolworths was forced to issue a profits warning in December after a weak run-up to Christmas.

Mr Corbett admitted yesterday that the recent performance of the retail chain had been disappointing but insisted that the “building blocks are in place for a recovery” under Trevor Bish-Jones, the chief executive.

“My six years as chairman of Woolworths is up at the AGM and it is time to hand over the reins,” said Mr Corbett, who will not receive a payoff from the group.

Mr North, a former finance director of Bass and the Burton Group, who was ousted as chief executive of Intercontinental Hotels Group in September 2004, has been seen as a likely replacement for Mr Corbett since he joined the Woolworths board five months ago. Shares in Woolworths eased ¾p to 32p yesterday on news of his appointment, with one analyst saying it would “not make much of a difference”. Another said: “It will be like changing between the AA and the RAC.”

Mr North was part of the bid team that was assembled by the retail tycoon Sir Philip Green to bid for Marks & Spencer in 1999.

The resignation of Mr Corbett, who will continue to chair Britvic, the drinks company, and SSL International, the Scholl sandals to Durex condoms group, comes as Woolworths is under increasing pressure from shareholders to break itself up.

There is speculation that Baugur, its biggest shareholder with a 10 per cent stake, could make a bid for the company. An £837 million takeover approach by Apax Partners, the private equity firm, was pulled in 2005 after reports of poor trading. Baugur refused to be drawn on its interest last night.

Analysts said that Woolworths’ current trading performance would make the retailer likely to consider any bid approach.

One commented: “Woolworths would bite the arm off anyone even if they came near them with an offer. The change of chairman will not make them any more vulnerable to a bid.”

Although Woolworths has seen its high street stores suffer as rivals cut the prices of entertainment products such as CDs and DVDs, its wholesale division has enjoyed a stronger performance.

Mr Corbett, who made headlines in 2000 when he resigned as chief executive of Railtrack after the Hatfield crash, in which four people died, said yesterday that he was particularly proud of Woolworths’ entertainment, wholesale and publishing businesses.

Mr North added: “Woolworths is a well-recognised brand with a wide high street presence. The entertainment businesses have strong positions in their respective markets.”

Woolworths said in January that its like-for-like sales in the six weeks to January 13 had fallen 4.6 per cent compared with a slide of 6.5 per cent in the 18 weeks to December 2. Total sales were up 2.2 per cent.

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