The former finance chief of WH Smith has abruptly withdrawn from a planned board position at Greggs following a devastating audit report that uncovered serious accounting irregularities during his tenure.
Robert Moorhead, who served as WH Smith's finance director for over two decades before stepping down in 2024, was due to join the high street bakery chain as a non-executive director and audit committee chair.
Accounting Scandal Unfolds
The situation began to unravel when WH Smith discovered it had overstated its North American profits by £30 million after Moorhead's departure. The company immediately instructed Deloitte to conduct a comprehensive review of its US auditing practices.
The findings were damning. Deloitte's investigation revealed the retailer had "insufficient systems, controls and review procedures" in place and identified "weakness in the composition of the finance team."
The accounting misstatement, identified in August, had catastrophic consequences for the FTSE 250 firm. Shares plummeted by 42 per cent overnight, casting serious doubt on the future of long-serving chief executive Carl Cowling.
Leadership Fallout
On Wednesday, WH Smith announced that CEO Carl Cowling would step down after six years at the helm. In a statement, Cowling acknowledged the seriousness of the situation, stating: "Whilst the issues identified in the Deloitte review arose in our North American division, I recognise the seriousness of this situation and as group CEO feel it is only right that I step down from my position."
The leadership changes come during a pivotal transformation for WH Smith. Earlier this year, the company sold its high street business to private equity firm Modella Capital for £76 million, ending the brand's 233-year presence on UK high streets.
The remaining WH Smith shops will now focus exclusively on travel locations including airports, train stations, motorway service stations and some hospital stores. The former high street stores have been rebranded as TG Jones.
Greggs Responds
Greggs confirmed in a statement to investors on Wednesday that Moorhead had "withdrawn his candidacy for the position of non-executive director." The bakery chain had originally announced his appointment in July, but delayed it pending completion of the WH Smith review.
Kate Ferry, Burberry's chief financial officer, will continue in her role on Greggs' board following Moorhead's withdrawal. Ferry had previously announced her intention to step back in August, but remained in position when her replacement's appointment was delayed by the accounting controversy.
WH Smith has already moved to replace Moorhead, appointing Max Izzard, a former Burberry executive, as finance chief last year. The company's shares closed over seven per cent higher following the announcement of Cowling's resignation on Wednesday morning.
