Co-op boss steps down after four years as retailer swings to a loss after cyber attack
The boss of the Co-op will step down after four years, as the retailer reported it had taken a significant hit from a cyber attack and higher employment costs.
Shirine Khoury-Haq will leave Co-op after four years as chief executive on 29 March, and will be replaced by director Kate Allum on an interim basis.
It came after the Co-op was forced to defend its culture after allegations of a 'toxic culture' among leadership.
A letter to the board, seen by the BBC last month, raised complaints about a culture of 'fear and alienation'.
‘We heard very clearly that the term of toxic issues, they did not recognise it, and they were very clear about that,’ Khoury-Haq said today.
But she said staff had flagged there were ‘areas where we had not communicated as clearly as we could have.’
Khoury-Haq led the group through a major cyber attack last year, which it said today had a £107million impact on profitability.
The retailer's IT networks were hacked last April, which resulted in payment problems, product shortages, and the loss of customer data.
Khoury-Haq said: 'Following last year’s cyber attack, the organisation is now ready to deliver on an ambitious strategy of stabilisation and transformation.
Co-op swung to a loss last year following a cyber attack in April
Share this article
'This extends beyond the timeframe I had planned for my CEO tenure, and now is the right moment to hand over to leadership that can commit to seeing the strategy through.'
Co-op, which is owned by its 6.2 million members, reported an underlying operating loss of £35million, as revenues fell 2.3 per cent to £11billion.
The retailer, which operates across more than 2,500 stores, said the hack had cost it £285million in lost sales - higher than the £206million it reported in September - and a direct £86million hit to its profits.
Co-op also pointed to an additional £150million 'cost headwinds'. These include £47million worth of regulatory costs, made up of National Insurance increases and new packaging taxes.
It said it planned to cut £200million of operating costs this year to help it return to profitability.
Co-op joined other retailers in warning of the instability caused by the Iran war, which would hit consumer confidence this year.
'Trading conditions remain difficult and the current geopolitical landscape is adding further instability,' said Khoury-Haq.
DIY INVESTING PLATFORMS
Affiliate links: If you take out a product This is Money may earn a commission. These deals are chosen by our editorial team, as we think they are worth highlighting. This does not affect our editorial independence.
Compare the best investing account for you
