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Retailer Aldi Taps Funke Executive to Lead International Consolidation

Prefers discount supermarkets to newspapers. Source: PR
Prefers discount supermarkets to newspapers.
  • Why it matters

    Why it matters

    Thomas Ziegler will be the third person in a short time to try to consolidate the foreign operations of Aldi, one of the world’s largest supermarket discounters. Can he overcome corporate infighting at Aldi to help it save money and boost profit?

  • Facts

    Facts

    • At his last employer Funke, Mr. Ziegler was considered a strong leader who never adapted to the media business.
    • Aldi Süd now has more sales internationally than it does in Germany.
    • Aldi Süd was founded by Karl Albrecht, one of the two co-founders of the Aldi dynasty and one of Germany’s richest men.
  • Audio

    Audio

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It’s only been eight months since Christian Nienhaus left what was then a three-person management team at the Funke media group, a publisher of regional newspapers and women’s and television magazines based in Essen. Mr. Nienhaus was a member of the top management board.

Now Thomas Ziegler, who came to Funke in 2012 from retail giant Metro, will not renew his contract at Funke the end of the year. Instead, he will be moving to the coordinating council at Aldi Süd, the southern German regional group of the global food discounter Aldi, a spokesperson for the supermarket chain told Handelsblatt.

At Funke, Mr. Ziegler was responsible for finance and had been considered the de facto leader in top management after Mr. Nienhaus’ departure.

During Mr. Ziegler’s tenure, Funke acquired several magazines and two newspapers, the Hamburger Abendblatt and Berliner Morgenpost, from Axel Springer, one of Europe’s largest publishing companies and home of the popular German tabloid Bild. The deal cost Funke €920 million ($1.2 billion).

The position at Aldi Süd has been vacant since December 2013. It’s apparently not an easy job.

The last executive to hold the position, Frank Lutz, a former chief financial officer at MAN, quit after only seven months. Mr. Lutz’s predecessor, Johann Mörwald, also lasted only a short time.

 

Aldi Süd and Aldi Nord-01

 

So Mr. Ziegler is entering difficult territory. Mr. Lutz had been hired by the powerful head of Aldi Süed’s supervisory board, Peter Heister, the son-in-law of the recently deceased Aldi co-founder, Karl Albrecht. Mr. Heister had charged Mr. Lutz with creating a financial holding company in Salzburg to run foreign operations for the discounter, which is headquartered in Mülheim-an-der-Ruhr in northwest Germany.

The position that Mr. Ziegler is scheduled to take over pays well. According to Manager Magazine, his predecessor Mr. Lutz received €3 million in salary.

But Mr. Lutz ran into massive resistance on Aldi Süd’s coordinating council – an institution that functions in a private company akin to the management board of a stock-held corporation. The head of the council, Norbert Podschlapp, as well as two other council members, Robert Ochsenschläger and Michael Klöters, were uneasy with Mr. Lutz’s lack of retail experience. They were also apparently worried about their own positions.

Aldi Süd’s international business, which includes stores in Britain, Austria, Australia and the United States, now contributes more to the company’s total revenues of €38 billion ($49 billion) than the domestic market in Germany does.

At Aldi, Mr. Ziegler has the advantage of experienced in retail.

For 15 years, the 47-year-old was head of Metro in Düsseldorf. As financial manager for the Metro-owned food retailer Real he supervised the takeover of Wal-Mart Deutschland. He later managed finances of the retail division and was responsible for the company’s real estate business.

The position that Mr. Ziegler is scheduled to take over pays well. According to Manager Magazine, his predecessor, Mr. Lutz, received €3 million ($3.9 million) in salary. Aldi Süd, however, does not award bonuses.

At Funke, Mr. Ziegler’s responsibilities will be assumed by Michael Wüller, who in May took over chairmanship of the supervisory board at Funke and is currently a partner at an auditing firm in Essen. He is known to be a close associate of Funke’s major shareholder, Petra Grotkamp. In the future, Ms. Grotkamp will chair the supervisory board.

Not everyone at Funke got along with Mr. Ziegler.

His relationship with Mr. Nienhaus was said to have been difficult and possibly the reason why Mr. Nienhaus decided to resign.

Some people at Funke believe that Mr. Ziegler, the former retail executive, never warmed to the media business. “At Metro he could set the course,” a source said. “That doesn’t work with regional markets. Thuringia is different than Braunschweig, Hamburg is different than the Ruhr Valley region.”

This article was translated by George Frederick Takis. Greg Ring also contributed. Kai-Hinrich Renner is responsible for Handelsblatt’s media reporting in Hamburg, Christoph Schlautmann has been a Handelsblatt editor since 1993. To contact the authors: renner@handelsblatt.com and schlautmann@handelsblatt.com

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