Sir Terry Leahy is poised to return to the public market as chairman of rapidly growing value retailer B&M Bargains, but a cloud may hang over the Liverpudlian’s head.

Sir Terry Leahy is poised to return to the public market as chairman of rapidly growing value retailer B&M Bargains, but a cloud may hang over the Liverpudlian’s head.

Leahy left Tesco in 2011 as the unquestionable figurehead of UK retail, bowing out after ripping up the rule book and spearheading the sector’s biggest ever transformation.

His 14 years at the top of the Cheshunt tree saw him elbow past fierce rivals in the UK, build a market leading online grocery business and establish strong arms in South Korea and Thailand. As Leahy helmed the highly profitable global business, analysts and investors understandably admired his leadership.

But, just over two years on, a potential return to the Square Mile for Leahy may not be met with the fervour some might anticipate. In December, he became chairman of B&M Bargains, a business built up from his hometown by Simon, Bobby and Robin Arora, and a possible IPO is on the agenda for 2014.

Since he exited Tesco, Leahy’s successor Philip Clarke has had to fight fires Leahy kindled in China, where the retailer has since sought local expertise through a joint venture, and its core market in the UK where tenacious competition and a lacklustre market has damaged the grocery behemoth.

But it has been Tesco’s retreat from the US which may have damaged perceptions of Leahy’s legacy with investors and the City. The lossmaking venture, launched with great fanfare by Leahy, hit Tesco’s profits and cast doubt on Sir Terry’s ability to predict market trends as the onset of the economic downturn hit US consumer confidence.

It is this ability to forecast market trends which will be key if B&M is to please public investors. The orange and blue striped wave has steadily been encompassing Britain as the retailer expands to serve bargain hunting shoppers.

But with green shoots appearing, investors will be keen B&M Bargains’ IPO prospectus makes clear the retailer’s tactics for all eventualities, including more prosperous times. Sir Terry’s Tesco legacy, deemed ‘sad’ by predecessor Lord MacLaurin, may cast a shadow over this and cause the retailer’s strategy to be carefully examined.

However, clearly Leahy remains an immensely talented retailer whose skills in rapidly expanding a retailer are unmatched.

Nabbing great locations was key in Tesco’s success and has proved likewise for B&M – Leahy clearly retains this passion, in an interview on Radio 4’s Desert Island Discs earlier this year he said he’d probably build a Tesco from driftwood while stranded.

It is also worth noting that Leahy will only be overseeing’s B&M business, with the Aroras continuing to drive forward a company which has experienced a meteoric rise to become valued at more than £1bn.

Leahy may be joined on the stock market by former colleague Andrew Higginson, who as chairman of rival Poundland is also mulling an IPO as early as next year. Similarly, former Tesco marketing boss Tim Mason is to float Bonmarché next month as its chairman.

Another key question to be addressed is this; is it too soon to think about IPOs? In Bonmarché and B&M’s cases, both have been under new ownership for less two years and there is a sense that the appetite for IPOs that’s flooding the market could dry up as quickly as it came.

If Leahy sets his B&M boat afloat and returns to the City there will be plenty ready to back him, but there will no doubt also be a vocal sceptical quarter raising concerns over his Tesco legacy and what that says about his strategic decision making.

Alex Lawson is a senior reporter at Retail Week