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DSG International, owner of Dixons, Currys and PC World, will be without a chief executive for three months unless it can persuade Tesco, the supermarket group, to release the electrical-goods retailer’s new boss, John Browett, from a six-month notice period.
Mr Browett, Tesco’s operations development director and former chief executive of Tesco.com, has been put on six months’ gardening leave after DSG announced last week that it had recruited him to succeed John Clare, chief executive of DSG for 13 years.
Mr Clare is to retire in September, but because Mr Browett is constrained from working under his six months’ gardening leave, he will not be able to join DSG, a FTSE 100 company, until December.
It is understood that there have not been any discussions between DSG and Tesco on securing an earlier release of Mr Browett, but DSG is keen to bring its new chief executive on board as soon as possible.
However, a spokesman for Tesco said that Mr Browett was now on gardening leave and that since he is still employed by the supermarket group he cannot work for any other company during the six months.
Mr Browett will become chief executive without having a handover period with his predecessor at a critical time for DSG. The group will have to decide in December whether to exercise an option to buy a 10 per cent stake in Russia’s largest electrical retailer, Eldorado, for £190 million.
DSG is then contracted to buy the rest of Eldorado for a total of £966 million after three years, causing analysts to cast doubt over the move, given the risks of expanding into Russia.
DSG has already experienced difficulties in its international operations, recently closing its French business and announcing plans to spend £200 million on restructuring its Italian division.
Due diligence on Eldorado has already begun under the stewardship of Mr Clare, but it will be up to Mr Browett to push the button on the deal when he joins DSG.
It is doubtful that Mr Clare will stay with DSG beyond September as a consultant until Mr Browett comes on board. DSG’s day-to-day management is overseen by a ten-member executive committee, which will continue to run the business until Mr Browett arrives.
Tesco has acquired a fearsome reputation for making sure that departing directors adhere to the full terms of their contracts.
Despite the looming delay in joining DSG, Mr Browett’s appointment was well received by the City last week, and he is expected to use the expertise he gained in building Tesco.com into a leading internet trading operation to increase further DSG’s growing online sales.
DSG declined to comment.
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