DSG, the owner of Currys, Dixons and PC World, has appointed a senior Tesco director — the man who helped to build Tesco.com — as its new chief executive a week after John Clare announced plans to retire from the electrical retailer.

The news was seen as a coup for DSG and its shares rose by 1.4 per cent to 167.1p in early trading.

But John Browett's decision to leave Tesco, where he is operations development director, will spark renewed speculation of a "brain drain" at the company.

Mr Browett is joining DSG at a difficult time. The company was forced to close down its French business, discovered fraud in one arm of its business and is attempting to turn around its struggling Italian division.

Mr Browett will have to decide whether DSG should exercise an option to buy 10 per cent of the Russian-based retailer Eldorado and whether to buy the rest of the company in four years time for a total £1 billion.

DSG is conducting due diligence on Eldorado and has until December to decide whether to buy the group.

As well as having extensive experience on the operational side of running a business, Mr Browett, with Tesco since 1998, also became chief executive of the fledgling Tesco.com in 2000 and helped to build it into one of world's most successful online grocers.

DSG's e-commerce division is making a bigger contribution to the business and this year online sales generated 10 per cent of revenues compared with 3 per cent last year.

Since 2004, a number of key senior executives have left Tesco for retailing rivals, apparently frustrated that there is no clear succession path to the chief executive role, held by Sir Terry Leahy since 1997.

Early last year, Colin Smith left to join Somerfield and, before that, Tesco's Stuart Machin and Darren Blackhurst left for Asda, Scott Wheway went to Alliance Boots and Andy Coleman moved to J Sainsbury.

Mr Browett is yet to set a date for joining DSG and is understood to be working out the details with Tesco.

When Mr Machin told Tesco that he was leaving for Asda, he was forced to serve his gardening leave at a depot in Northampton — a two-and-a-half-hour drive from his home — where he wrote training material.

A spokeswoman at Tesco confirmed this morning that Mr Browett will be put on gardening leave, but declined to say where he would serve his notice period.

Tesco's shares increased from 440p to 443p.

Last week, Mr Clare told the market that he would retire from DSG on September 5 after 22 years with the business, 13 of which he has spent as chief executive.

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