Things happen when Malcolm Walker goes on holiday.

Seven years ago he had to rush back from the Maldives when Iceland issued a profit warning that led to his resignation. He was in the Maldives again in 2005 when Baugur, the Icelandic investment group, bought the frozen food retailer and decided to bring back its founder.

Now Mr Walker is said to be on a yacht in the Caribbean, soaking up the sun as the City digests the fallout from his audacious approach for Woolworths' 815 stores. His offer may have been rejected out of hand by the Woolworths board, but he could be one of the few retailers with the flair to turn the old lady of the high street around.

In the past three years, he has achieved the kind of recovery at Iceland that Woolworths investors dream of. When he took over in 2005, Iceland's like-for-like sales were falling by 10 per cent a year. This year, they are up 10per cent and underlying earnings are expected to be £130 million, compared with £57 million in 2005.

Mr Walker said in March: “We don't have a single store that loses money. We are flying.”

A return to Woolworths would see the multimillionaire's career turn full circle. Mr Walker's first job in retail in 1964 - after achieving four O levels and a “degree in common sense” - was as a trainee manager at the home of pick n' mix.

His entrepreneurial flair was ultimately his undoing. He was dismissed in 1971 as deputy manager of Woolworths' Wrexham store after it emerged that he was moonlighting, buying frozen food in bulk and splitting it into shopper-friendly portions at a store that he had opened down the road. He called it Iceland.

After three decades of almost unbroken success, his darkest moment came in December 2000 when he sold £13.5 million of shares only weeks before a profit warning. He was forced to step down as executive chairman of the business but was cleared by the Serious Fraud Office of any wrongdoing and he harboured a deep resentment about the way he had been treated by the rest of the Iceland board.

On his return, Mr Walker removed the clutter of the previous management team, cut costs, froze pay and sold underperforming stores. “I stopped selling cigarettes, gas, flowers, newspapers, fresh fish, sandwiches, My Little Pony, fresh bread, sewing kits, pet food,” he says. The chance to do the same at Woolworths is likely to prove tempting enough for him to return with a higher offer.