Will Coles be the scene of next Norman conquest?

Archie Norman, the man credited with reviving UK retailer Asda Group Plc, joined Wesfarmers Ltd as an advisor for its A$19.7 billion ($17.4 billion) takeover of Coles Group Ltd.

Norman will help develop plans for the Coles supermarket business, Australia's second-largest, and advise on the recruitment of executives, Perth-based Wesfarmers said.

Norman is expected to be deputy chairman of the board overseeing Melbourne-based Coles' food, liquor and convenience store chains.

Wesfarmers plans to spend A$5 billion to revive sales at Coles and reverse a loss of market share to larger rival Woolworths Ltd.

Norman ran Asda, the United Kingdom's third-largest grocer, for almost nine years before selling the company to Wal-Mart Stores Inc in July 1999 for 6.7 billion pounds, seven times the company's market value when he started.

"Archie's great retail expertise in leading the team that so successfully turned around Asda will make a tremendous contribution before and after we embark on that task" at Coles, Wesfarmers Chief Executive Officer Richard Goyder said.

Wesfarmers shares rose 32 cents to A$43.30 at 3:02 pm in Sydney and have gained 15 percent this year. Coles rose 12 cents to A$15.94.

The board of Coles recommended the Wesfarmers offer on September 5 with the deal needing the support of 75 percent of Coles shares voted at a meeting on November 7.

For sale

Coles put itself up for sale in February after abandoning Chief Executive Officer John Fletcher's promise to boost earnings 35 percent within two years.

The retailer posted a 36 percent drop in net income to A$747.8 million in the year ended July 29.

Its supermarket profit margin, which measures earnings as a proportion of overall revenue, is 3.39 percent compared with 5.16 percent at Woolworths.

"I have seen enough of the business to know that there is enormous scope for improvement," Norman said. "The Coles brand and their underlying competitive position remains potentially very strong."

Norman, who is joining Wesfarmers through his management company Aurigo Management Partners, is also an adviser to investment bank Lazard LLC.

The 53 year old, who has a Master's Degree from Harvard, entered the British parliament's House of Commons in 1997 representing the Conservative Party. He retired from the Commons in 2005.

Bloomberg News

(China Daily 10/19/2007 page16)