Currys PLC (LSE:CURY) opting to promote Fredrik Tønnesen from within its Nordic division is a sensible move, analysts said, even if it did not get much of a share price reaction.
Rather than go for a change of direction, the electricals retailer's decision suggests the board believes the turnaround engineered by Alex Baldock remains unfinished, but firmly on the right track.
Tønnesen has spent more than 20 years with the group, starting on the shop floor before rising through management ranks in Norway and later across the Nordics.
"Having met him on several occasions, we believe he is well suited to the CEO role, bringing decades of experience with the group," said analysts at house broker Panmure Liberum.
Most importantly, he is making the move with a recent turnaround of his own to point to, as profits in the Nordic business more than tripled under his leadership, while customer and employee satisfaction scores improved significantly.
The challenge now is whether he can replicate that success on a larger stage.
Baldock leaves behind a business in far better shape than when he arrived in 2018, with operations simplified, loss-making international ventures exited, the balance sheet strengthened and profitability restored.
Full-year adjusted profit before tax is expected to be about £191 million, while the group ended the year with more than £170 million of net cash.
For investors, the appointment removes much of the uncertainty that often accompanies a chief executive succession, Panmure said, describing the move as "sensible" and said it "signals continuity" with a strategy that has been highly successful under Baldock.
Continuity matters in a competitive market where execution often counts for more than radical strategic change.
Tønnesen inherits a business with momentum, but also one where margins remain relatively thin and growth opportunities increasingly depend on operational improvements rather than transformational moves.
The shares rose 0.8% on the news to 148p.
“The muted market reaction to his successor’s appointment isn’t necessarily a bad thing," said analysts at AJ Bell.
"The share price might have fallen if investors didn’t like the new person. Instead, we’ve got a situation where the market is taking a ‘wait and see’ approach for the new CEO to prove their worth."
Tønnesen helped to steer the Nordics business "back onto a solid path after a rocky journey", they added, with that and his two decades’ experience ", means he should be able to hit the ground running when he takes over in August".
