Row at Topps Tiles escalates as major shareholder accuses chairman of ‘failings of leadership’

The boss of the major shareholder trying to oust Topps Tiles non-executive chairman Darren Shapland has written to, outlining his fears for the Leicester retailer should he not be successful in his bid.

Piotr Lipko, managing director of Polish-based MS Galleon (MSG), which owns an almost 30% share in Topps, is looking to replace Darren Shapland, Topps’ non-executive chairman and director of the company, while at the same time install Lidia Wolfinger and Michael Bartusiak from MSG as non-executive directors.

MSG operates several businesses in the home improvement sector. Lipko describes the company as “an expert in tiles, bathroom and flooring manufacturing and retail sectors”. One of MSG’s portfolio companies – Cersanit – is the third biggest European manufacturer of tiles, sanitary ware and bathroom furniture. MSG owns (via its subsidiaries) over 250 retail stores selling tiles, bathrooms, and furniture.

Lipko believes Shapland should step down from his position at Topps, accusing him of “failings of leadership”.

The MSG boss says that, since Shapland became director and non-executive chairman of Topps in March 2015 the firm’s earnings’ per share has dropped by 31%, it has a lower market capitalisation than rival Victoria Plumbing, profit before tax has declined and revenues has show only sluggish growth.

Lipko added: “We understand that Darren Shapland has previous experience in similar retail sector roles. During his time with Carpetright (as CEO) between 2012-2013, it recorded a 53% drop in profit. Darren Shapland is currently the chairman of one other company in the retail sector (in addition to Topps Tiles), Moo Print. Moo Print recorded a 40% decline in its turnover in 2020, despite offering only online services, which saw a boom during the recent Covid-19 pandemic.

“In MS Galleon’s view, Topps Tiles has been performing below expectations during the period that Darren Shapland has been non-executive chairman. We believe that Topps Tiles’ poor performance during this time has caused an adverse impact on the return on investment for shareholders. In our view, there is an inadequate growth strategy currently in place for Topps Tiles, and MS Galleon believes that the removal of Darren Shapland is required to secure the future growth of Topps Tiles to benefit all the shareholders.”

After the bid to replace him was launched yesterday (December 7), Shapland said: “The board strongly rejects these proposals, which it believes expose a clear conflict of interest between MSG’s objectives for Cersanit and the interests of all Topps shareholders. The board welcomes the support received from our other largest shareholders, who have confirmed their intention to vote against the Requisitioned Resolutions at the AGM.”

Keith Down, senior independent director of Topps, added: “The board unanimously rejects these resolutions which it does not consider to be in the best interests of the company and its shareholders as a whole. In proposing a resolution to remove the chairman, who has led communications with MSG on behalf of the board, MSG is seeking simply to strengthen its own position.”

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