New directors lift Morrisons

Troubled British supermarket group Morrisons appeared to have won important breathing space today as the City gave its backing to a major boardroom overhaul.

Analysts said the appointment of three non-executives boosted the credibility of chairman Sir Ken Morrison at a time when the firm has run into difficulties integrating its £3bn (€4.5bn) purchase of Safeway.

Morrisons shares were initially close to the top of the FTSE 100 Index risers as investors got their first chance to react to last night’s news. They later fell back to close to their opening mark.

The firm said it had appointed former Littlewoods chief executive Susan Murray, Nigel Robertson, who helped set up online grocery shopping operation Ocado, and Brian Flanagan, who worked for confectionery group Mars for 26 years. It plans to recruit another director in the next month.

Mr Morrison and Mr Jones are widely said to have disagreed on the appointments, with the chairman thought to have been holding out to secure a big name to appease investors.

Richard Ratner, retail analyst at stockbroker Seymour Pierce, said the move was proof Mr Morrison had not “lost touch with reality”.

He said: “For the time being, the war appears to be over, but it must be inevitable that at some time in the not too distant future Sir Ken will step up to be life president.”

Mr Ratner said the move must be viewed as a victory for non-executive Mr Jones, even though non-executives were still outnumbered by Mr Morrison’s executive board.

The Bradford-based supermarket chain has been under great pressure to make the appointments since suffering in the wake of its £3bn (€4.5bn) acquisition of Safeway last year.

Any signs of boardroom unrest would have unsettled the City, which has been rocked by five profits warnings since the purchase.

Mr Morrison recently announced that he was stepping down from day-to-day running of the firm in order to concentrate on its strategic vision.