On 27 February 2019, Ocado Group PLC (LON:OCDO) announced that it had entered into certain arrangements with M&S and members of its group to establish a new 50/50 joint venture comprising Ocado’s UK grocery retail business, supported by a new partnership for solutions services underpinned by the Ocado Smart Platform and the provision of branding and sourcing from M&S. Further details of the Arrangements are set out in Ocado’s shareholder circular published on 26 April 2019.
Ocado’s shareholders voted in favour of the Arrangements on 20 May 2019. Following the satisfaction of certain other conditions, Ocado is delighted to announce that completion of the Arrangements took place today with the sale of 50 per cent. of Ocado Retail Limited to a wholly owned subsidiary of M&S.
Following completion of the sale, Ocado has appointed Melanie Smith, currently Strategy Director at M&S, as CEO of Ocado Retail Limited and Lawrence Hene, currently the interim managing director of Ocado Retail Limited, as deputy CEO for a transitional period before he moves back into a senior role within the Ocado group.
The other directors of Ocado Retail Limited are Tim Steiner and Duncan Tatton-Brown, respectively Chief Executive Officer and Chief Financial Officer of Ocado, and Steve Rowe and Stuart Machin, respectively Chief Executive Officer and Food Managing Director of M&S. Tim Steiner will also be chair of the board of Ocado Retail Limited.
Although M&S is now a 50 per cent. shareholder in Ocado Retail Limited, as described in more detail in the Circular, Ocado Retail will not sell M&S products until 1 September 2020, unless Ocado Retail’s current arrangements with Waitrose terminate sooner. From that date, over three quarters of the UK population will be able to shop for a full supermarket range via Ocado.com, comprising over 6,500 M&S food products, Ocado’s exclusive brands and own label products, and a full range of branded goods.
Tim Steiner, Chief Executive Officer, Ocado, said:
“Ocado Retail’s future, as part of a joint venture with M&S, is full of opportunity. The new company will be able to offer customers even greater range, service, quality and value. Our collaboration will also allow us to grow the business faster, add more jobs, and create more value for all our stakeholders. We are very excited to be working together.
“I would like to take this opportunity to thank Lawrence for his incredible achievements with ocado.com since 2011, which he has been instrumental in growing to the business it is today and I look forward to continuing to work with him, both during his transitional role at Ocado Retail Limited and when he moves back to the Ocado Group. I am very excited about Ocado Retail Limited continuing to realise its fullest potential under Melanie’s leadership.”
Steve Rowe, Chief Executive Officer, M&S, said:
“I have always believed that M&S Food could and should be online. The addition of Ocado to our family of businesses marks M&S’s first truly transformational step in shaping our future as a digital first retailer, as we combine the magic of M&S food with Ocado’s award-winning service to create a new and compelling proposition. Through its unique OSP technology, Ocado has developed the most cost advantaged model in online grocery retail and our new partnership unlocks growth for M&S Food through an immediately profitable, scalable presence in the UK’s fastest growing grocery sales channel.
“I am absolutely delighted that our JV will be led by Melanie. She is a real talent; who combines extensive retail knowledge, strategic vision and a focus on delivery.”