Back in November, Allan Leighton, the former CEO who has now returned as executive chairman, went on record as saying that it could take three to five years to revive British supermarket chain Asda Group Ltd’s fortunes. A sobering assessment, however, reveals that even a cursory look at the business reveals that it is facing challenges on multiple fronts. The business clearly needs strong leadership and as one former Asda senior executive who worked under Leighton told Fortune, “Allan is inspirational and probably the best person for the job. However, Walmart spent the last decade removing the entrepreneurial spirit from the business so that people stopped thinking for themselves”.
The grocer, whose debt is currently around £6 billion ($7.4 billion) is facing an impending £900 million ($1.1 billion) bill due by 2028, which could threaten the chain’s entire capital structure, according to credit rating agency Fitch. The former senior exec confirmed, “When a business is laden with that much debt, they’re in big trouble”. Going on to say that, “It probably can survive, however, it’s all about surviving from one quarter to the next in order to service the debt”.
