MENU

Can a new boardroom save Woolworths Limited?

Credit: Scott Lewis

Woolworths Limited (ASX: WOW) today announced the appointment of new director, Ms Holly Kramer, as a Non-Executive. Ms Kramer will commence in the role in the second half of Woolworths’ 2016 financial year.

Along with current directorships on the boards of Nine Entertainment Co Holdings Ltd (ASX: NEC) and AMP Limited (ASX: AMP), Ms Kramer brings a wealth of experience in retail from her time as CEO of Best & Less, and as an executive at Pacific Brands Limited (ASX: PBG) and Telstra Corporation Ltd (ASX: TLS).

Ms Kramer’s appointment to the Woolworths board follows the resignation of a number of directors and senior managers, the appointment of a new Chairman and the ongoing search for a new CEO, to replace the outgoing Grant O’Brien.

Troubles within its leading supermarkets business, and concerns over its Masters home improvement chain have resulted in falling profits and a plunging share price. Shareholder pressure has resulted in sweeping changes to the top tiers of the company’s management.

Is it time to buy Woolworths shares?

Woolworths’ share price is down 31% over the past 24 months. Undoubtedly, increased competition within its supermarkets business, from the likes of Aldi, Costco, and Coles, owned by Wesfarmers Ltd (ASX: WES); has been the major catalyst for a rerating of its stock.

Management’s failure to recognise and react to changes in the marketplace have accelerated the decline.

The company is slowly rebuilding its leadership team, reinvigorating its marketing campaign and investing heavily in its various businesses. However, I think investors considering making a purchase of Woolworths’ shares should consider holding off, at least until a new CEO is appointed and we’re afforded better insights into the effectiveness of the group’s strategy for dealing with the growing competition.

A better buy than Woolworths shares

Woolworths shares may not be a clear-cut buy at this time, but that's okay because Scott Phillips, lead advisor of Motley Fool Share Advisor, has just announced his #1 dividend stock of 2015-2016 - and I think it is a GREAT BUY today! Best of all, for a limited time, Scott is giving away its name and stock code free in his brand-new investment report! Simply click here, enter your email address and we'll send you his report.

Motley Fool contributor Owen Raskiewicz has a financial interest in Woolworths Limited.

Owen welcomes your feedback on Google plus (see below), LinkedIn or you can follow him on Twitter @ASXinvest.

Unless otherwise noted, the author does not have a position in any stocks mentioned by the author in the comments below. The Motley Fool Australia has no position in any of the stocks mentioned. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Two New Stock Picks Every Month!

Not to alarm you, but you’re about to miss a very important event! Chief Investment Advisor Scott Phillips and his team at Motley Fool Share Advisor are about to reveal their latest official stock recommendation. The premium “buy alert” will be unveiled to members and you can be among the first to act on the tip.

Don’t let this opportunity pass you by – this is your chance to get in early!

Simply enter your email now to find out how you can get instant access.

By clicking this button, you agree to our Terms of Service and Privacy Policy. We will use your email address only to keep you informed about updates to our website and about other products and services we think might interest you. You can unsubscribe from Take Stock at anytime. Please refer to our Financial Services Guide (FSG) for more information.