J Sainsbury

Sainsbury’s has built its reputation on being a wholesome family-run company. But this year will be the first that a family member is not head of the company, following chairman Lord Sainsbury of Turville’s handover to non-executive chairman Sir George Bull.

Sainsbury’s year so far has been characterised by change. Hundreds of its staff face redundancy and the company’s full-year trading figures are expected to show a sales increase of only 1.5 per cent.

On top of this, Sainsbury’s and three competing supermarkets – Asda, Tesco and Safeway – are under investigation by the Competition Commission for alleged profiteering.

In the face of all this Sainsbury’s remains defiant. It has announced that it will continue to expand its US operations and is reviewing its commercial structure.

Sainbury’s has always had the ability to bounce back. Its first store was set up in 1869 by John James and Mary Ann Sainsbury. The store’s cleanliness gave it enough of an the edge over the unsanitary shops in London at that time, to allow the family to open a second store in 1876. By 1914, Sainbury’s had 115 outlets.

But disaster struck during World War Two when sales dropped by 50 per cent and shops were destroyed by German bombs.

Its fortunes changed for the better again in 1950 when Sainbury’s opened its first self-service store in Croydon. It went public in 1973 and bolstered its US interest by acquiring New England-based Shaw’s Supermarkets in 1987.

Sainsbury’s legal department has itself experienced change over the past few years. Head of legal David Thurston says: “The range of work we cover has evolved over the past five or six years.

“We had been very much focused on near market work, the day-to-day practical work. But we are now trying to get much more involved in the strategic issues of the company.”

The number of in-house lawyers has increased slightly over the past two years so Thurston now heads a nine-strong team.

Sainsbury’s legal team also includes a US presence in the form of Sandy Doran, company secretary and vice president responsible for legal affairs, who the company inherited when it took over Shaw’s Supermarkets. She is responsible for heading up much of Sainsbury’s international legal work. For example, she worked closely with Sainsbury’s US firm Sullivan & Cromwell on last year’s £297m acquisition of Boston-based Star Markets.

As to whether Sainsbury’s has an official panel, Thurston says: “We have used Denton Hall as our principal corporate adviser for 50 years. About six or seven years ago we set up a panel to advise on property work to focus on two areas: the development and extension of the stores and the ongoing estates and management side of things.”

It has also recently taken on Linklaters. “The company has said that we are looking to increase internationally so that influenced the choice,” says Thurston.

As well as having two lawyers specialising in employment, Sainsbury’s also relies on Eversheds to provide advice in this area. Its three other specialist legal divisions are trading and marketing, commercial, and retail operational issues, which includes claims, customer litigation and wrongful arrest.

According to Thurston, the nine-lawyer team is capable of coping with Sainsbury’s huge number of staff. He says: “It is not the amount of employees that generates work, it is the amount of business activity.”

But with the threat of redundancy looming over a number of Sainsbury’s staff – though not the legal department – Thurston may well find his theory turned on its head.

“It is conceivable that, as a result of these changes, there may be some individuals who will bring claims against the company which we would handle,” says Thurston.

David Thurston
Head of legal
J Sainsbury

Statistics
Organisation J Sainsbury
Sector Retail
FTSE 100 ranking 44
Market capitalisation £11.76bn
Employees 154,000
Head of legal David Thurston
Reporting to Nigel Matthews, group secretary
Legal function 12 lawyers
Main location for lawyers Blackfriars, London
Main law firms Denton Hall, Linklaters, Eversheds (licensing and employment), Sullivan & Cromwell (US), Addleshaw Booth & Co (property), Lawrence Graham (property), SJ Berwin & Co (property), Cameron McKenna (property)