Archie Norman to step down early as Asda's chairman

ARCHIE NORMAN is to step down early as chairman of Asda in a move that will free him to concentrate on other business opportunities.

Mr Norman, who is a Conservative MP and former Tory party chairman, will leave Asda in the next few weeks. He had been expected to stay on at least until early next year in order to help oversee the integration with Wal- Mart, the American discount chain that bought Asda in June.

But with the handover proceeding smoothly he is leaving ahead of schedule, leaving him free to develop new business ventures.

These include his involvement with Knutsford, the shell company which ignited the stock market last week when it announced that four high-profile entrepreneurs, including Mr Norman, had bought stakes in the group.

They said they intend to use Knutsford as a takeover vehicle to take advantage of under-performing retail and property assets.

Knutsford has been linked with a possible bid for a number of struggling retailers including J Sainsbury, Marks & Spencer and Storehouse, though the group has been trying to play down talk of a "mega-bid".

As chairman of Asda, Mr Norman would have been unable to become involved in a bid for a supermarket group on the grounds of conflict of interest.

This would have ruled out Sainsbury's and Somerfield as well as Marks & Spencer, which derives 40 per cent of its business from food.

Storehouse, whose Mothercare chain competes head on with Asda's George range of clothing, would also have presented a problem.

When Mr Norman steps down from Asda later this month he will retain an advisory role. However, there is no non-compete clause in his contract which would prevent him from joining or buying a business engaged in similar commercial activities.

While this might make a supermarket bid appear more likely Mr Norman retains a huge emotional attachment to Asda. To immediately set up in direct competition with the company through which he made his name may present him with problems of loyalty, at least in the short term.

But after a decent interval Mr Norman may feel able to return to the supermarket or clothing sectors.

Mr Norman and his three colleagues in Knutsford, Nigel Wray, Nick Leslau and Julian Richer, are thought to be astonished by the frenzy of excitement which accompanied the news that they are on the acquisition trail.

Privately they have been suggesting that their potential targets are much more modest than the companies being mentioned. Knutsford only has pounds 5m of assets and the group's prospectus implies that it is likely to use its own assets rather than equity to fund deals.

Mr Norman joined Asda in the early 1990s when the company was on the brink of bankruptcy after a disastrous expansion programme.

He turned the group around, cutting debts and focusing the company on a policy of low prices. The shares had risen 10- fold by the time the deal with Wal-Mart was struck.

Mr Norman has also been linked with a vacant chairman's position at Marks & Spencer.