Co-op opts for Euan Sutherland’s ‘DIY’ experience to fix bank expansion

FIX-it man Euan Sutherland is set to leave the world of DIY in a surprise move that will see the Scots-born executive take over the top job at Co-operative Group as it grapples with a major expansion of its banking business.

Sutherland, currently chief operating officer at B&Q owner Kingfisher, will succeed Peter Marks as chief executive of the Co-op in May. Marks is retiring after 45 years at the organisation, having earlier this year agreed to buy 632 bank branches from Lloyds in a deal worth £750 million.

His successor is a key member of the so-called “fab five” retail board at Kingfisher, overseeing a rebound in domestic profits during his initial years as the head of operations in the UK and Ireland.

Having been promoted and brought on to the main board earlier this year, he was seen as the heir apparent to eventually take over from Kingfisher chief executive Ian Cheshire. Instead, he will join the Co-op amid what Marks has previously described as the “worst” business conditions in more than 40 years.

Group profits fell by a third in the first half of this year, led by a 68 per cent decline in its second-largest division, banking.

Operating profits tumbled to £36.9m amid on-going uncertainty in the eurozone, lower interest rates and higher levels of bad debts.

Meanwhile, the group’s 3,000-strong food store division reported a 16 per cent decline in operating profits, which fell £119m as the business suffered from exceptionally wet weather and increased competition from larger supermarket chains operating out of convenience store formats.

Sutherland will be familiar with the challenges facing the latter, having served as a non-executive on the Co-op’s food board for the past two years. He is also a non-executive at SuperGroup, owner of the Superdry fashion label, and has previously held marketing roles at companies ranging from Mars to Matalan.

Co-op chairman Len Wardle said Sutherland’s experience across a variety of sectors made him an ideal candidate to lead a “complex customer-facing business”. In a statement, the 43-year-old Sutherland added that he was “pleased to be given the opportunity to lead the organisation at this important time”.

Highly-regarded across the retailing sector, Sutherland’s appointment was widely welcomed by analysts who noted that he has impressive operational skills in addition to marketing expertise.

However, a few wondered whether he had the necessary expertise to handle the complex task of integrating the Lloyds branches with the Co-op’s existing banking operation. Many had expected the mutual to opt for someone with a banking or financial services background.

“That will be the real test – pretty much everyone agrees that his retailing credentials are impeccable,” said one analyst.

Born in Edinburgh and initially raised in North Berwick, Sutherland moved with his family to Glasgow at the age of nine. After studying accountancy at Edinburgh University and training to be an army officer, he took a business studies course at Aston University that led on to a graduate training scheme with Boots.