By Neil Maidment
LONDON (Reuters) - Tesco (L:TSCO) on Thursday turned to Halfords (L:HFD) CEO Matt Davies as the surprise choice to fix its UK supermarket business, won over by his ability to improve customer service and employee morale.
News of his appointment sent shares in Halfords, where the 44-year-old revitalised a tired car parts to bicycle firm in just over two years, tumbling 8 percent.
Despite no supermarket experience, Davies will become one of the most important directors at the world's No.3 retailer, heading a UK business with nearly 70 percent of overall sales but one that has lost market share in a rapidly changing industry due to tired stores, confusing offers and high prices.
"It came a little bit out of the blue, but then again totally understandable as far as Matt is concerned," Halfords Chairman Dennis Millard told Reuters, after cutting short a holiday in South Africa to handle the announcement.
"His most important attribute is team building ... this is arguably the biggest retail job in the country," he said.
Davies, who joins Tesco on June 1, will have to quickly exercise some of the skills used at Halfords, where he increased investment to overhaul staff training with schemes leading to qualifications and higher pay, improve customer services and strengthen ranges to increase sales.
He also took a hard line with suppliers, asking them to help fund his plans if they wanted to benefit from increased demand.
Improvements to store layouts and a revamped website with thousands more products also helped boost Halford's profits, which rose 11 percent in its first half to Sept. 26. The firm's share price has jumped 53 percent under his short watch.
Prior to Halfords, a strong customer service focus in his eight-year stint in charge of Pets at Home helped the British retailer establish itself as market leader, doubling in size and moving into areas such as veterinary care centres.
Crucially, both firms became hugely popular places to work under the easy-going and approachable Davies, featuring in Sunday Times surveys of the best places to work, with Halfords making it into the top 25 big companies last year.
"Matt is an experienced retailer with a proven track record of turning around businesses," said Tesco Chief Executive Dave Lewis, who outlined big plans to revive the grocer on Thursday.
The appointment of Davies will give Lewis more time to undertake important group work on Tesco's balance sheet, international operations and its remaining services.
Davies approach should fit well with Lewis. Since joining in September from Unilever (L:ULVR), Lewis has resisted investor pressure to produce a quick fix-all strategy and instead put customers at the heart of all the changes at Tesco.
Davies will leave with a glowing endorsement from Millard.
"At Pets at Home he built a very strong team and having left nearly three years ago the majority of them are still there," he said, adding Davies would leave Halfords in the same situation.
(This version of the story corrects Davies' age to 44 after clarification from Halfords)