Allan Leighton, chief executive officer of Pandora A/S, poses in this undated handout photo released to the media on Tuesday, Sept. 10, 2013. Pandora A/S, which has gone from stock market darling to disaster to darling again since its 2010 initial public offering, is taking a page from fast-fashion retailers like Zara, which introduces designs as often as twice a week. Source: Pandora A/S via Bloomberg EDITOR'S NOTE: NO SALES. EDITORIAL USE ONLY

The Co-operative Group is set to recruit Allan Leighton, who helped turn around supermarket group Asda, as its first independent chairman.

Mr Leighton, 61, is in talks to take the job, according to people familiar with the situation. It would mark a return to the grocery sector for Mr Leighton, who said he would “go plural” after helping sell Asda to Walmart of the US in 1999.

The member-owned Co-op has annual turnover of more than £10bn spanning food retailing, funeral care and legal services. It has returned to the black after a £2.5bn loss in 2013, but is being squeezed by discount supermarkets and its £1.4bn debt.

Mr Leighton was president of Loblaws, the Canadian retail chain, until 2008 and advises Galen Weston, of Loblaws’ founding family, who owns the Selfridges department store. He is also chairman of Pace, the set-top box manufacturer, and is about to step down as chief executive of Pandora, the jeweller, to become vice-chairman. He also had roles at Royal Mail and retailers Matalan and Peacocks.

The new chairman is being recruited to a slimmed-down board of 11. The 20-strong board, elected from its membership, was swept away last year after being blamed for a series of failures and scandals that brought the group close to collapse.

The group continues to rebuild after discovering a £1.5bn capital hole in its banking arm in 2013. Paul Flowers, the Methodist minister who chaired the bank, was forced to resign after being filmed taking drugs.

The Manchester-based Co-op relinquished all but a 20 per cent stake in the lender to owners of the bank’s bonds and has sold off its pharmacy chain and farms to reduce its debt burden.

Richard Pennycook, the former Wm Morrison finance director appointed chief executive last year, is refocusing the group on small convenience stores and selling off larger ones.

It remains the UK’s fifth-biggest grocer with 5.9 per cent of the market, according to Kantar Worldpanel, the consumer research company.

Clive Black, retail analyst at Shore Capital, the investment bank, said that appointing Mr Leighton would be “an inspired move”.

“There are not many grandees like that around. Allan Leighton and Archie Norman and their Asda team were Champions League retailers. It would give the Co-op a lot of credibility.”

He said Mr Leighton would be strong enough to control Mr Pennycook and his team.

Mr Leighton, whose father was a Co-op store manager, is also chairman of Business in the Community, the charity, which should please Co-op shoppers.

The Co-op has recommitted to its ethical stance, promising to stock more Fairtrade and locally sourced products. Mr Pennycook has promised to return profits to local areas around stores.

The new chairman must be in place by Co-op’s annual meeting in May.

There will also be three member-nominated directors and further independent directors to join Sir Christopher Kelly, senior independent director.

The group’s 7m members will be asked to approve the appointments at the meeting.

Pay could be a tricky issue. Euan Sutherland, chief executive, resigned in March 2013 after his proposed £3.5m pay packet was leaked.

The Co-op and Mr Leighton declined to comment.

Reputation built on customers, colleagues and cash

“Enjoy the pain,” Allan Leighton once told an interviewer about business turnrounds. His relish for suffering businesses may explain his interest in the Co-operative Group which has been trying to recover since discovering a huge hole in its bank balance sheet in 2013.

If appointed, Mr Leighton would preside over an entirely new board at the supermarket and funerals group. A scathing review of governance by Lord Myners, the former City minister, found the Co-Op’s existing 20-strong board of elected members was not effective or qualified enough to hold management in check.

The next job is to boost margins and ensure the group stems the loss of customers from its convenience stores.

Mr Leighton is the son of a Co-op store manager from the 1960s, when it still dominated the high street.

A former Mars executive, Mr Leighton teamed up with Archie Norman at the debt-burdened Asda in 1992. He became chief executive in 1996 and helped sell the group to Walmart of the US in 1999. His emphasis on “customers, colleagues and cash” paid off.

He then said he was “going plural” taking on a succession of jobs, often non-executive, usually in a shortlived troubleshooting role. These included a stint at Leeds United as it fought to stave off administration and the Royal Mail as it batted to reduce losses. Sport remains a passion.

He has also had non-executive directorship of Sky, and chairmanships at, Pace, the set-top box company, and retailers including Pandora, Peacocks and Matalan.

He became chief executive at Pandora, the jeweller, last year and its share price has doubled since. He is stepping down in March to take up the vice-chairmanship

He is also chairman of and investor in, a fast-growing ecommerce business based in Macclesfield.

The 61-year-old has homes in London and Canada, where he advises George Weston Ltd, which owns Loblaws, the supermarket chain.

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