This article is from the Australian Property Journal archive
DEPARTMENT store Myer has ended its relationship with CEO Richard Umbers effective immediately, after two years and 11 months.
Umbers’ departure comes only days after Myer announced that its important January stocktake sales were down 6.5%, which followed a 2.3% drop in total sales through November, with comparable store sales falling 1.8%. Sales for the first two weeks of December were also down by 5%. The poor sales prompted the company to warn that its interim profit could be slashed by between $37 million and $41 million.
The market reacted indifferently to the news, Myer’s share price rose by only 1 cent to close at 54.5 cents yesterday. It is a far cry from the $4.10 price during the public float in November 2009.
Myer chairman Garry Hounsell said board had lost patience.
“We are impatient for a turnaround in the company’s performance and the board has determined that it is in the interests of all shareholders for there to be a fresh approach to drive our future direction.
“At the time of my appointment as chairman in November 2017, I said I was impatient and this announcement reflects my desire to drive, first-hand, the urgency required to deliver shareholder value.
“On behalf of the board, I thank Richard for his hard work and commitment during the past three years and wish him well for the future,” he added.
Hounsell has been appointed as executive chairman whilst a search is underway for a new CEO.
Meanwhile Hounsell indicated in a media teleconference that Myer will not be engaging with any single shareholder to seek feedback on the appointment of a new CEO. The comments are aimed at rebuking billionaire Solomon Lew’s Premier Investments, who has been seeking a position on the board.
Umbers was appointed to lead Myer in March 2015, taking over from Bernie Brookes, and was tasked with turning the department store around under the “New Myer” strategy.
During his time, Umbers oversaw Myer’s investment in fashion retailer Topshop’s local operator Austradia.
Myer bought a 25% stake in Austradia in September 2015 for $9.8 million as part of a wider $600 million strategy to shake up its fashion offering and address the department store’s falling profits.
In May last year, Topshop Australia went into administration and Arcadia, the United Kingdom brand owner, agreed buy and operate the Australian Topshop and Topman businesses.
Last year, Myer also took a $38.8 million from its investment in Sass & Bide, a label it acquired in 2011.
Towards the end of last year, Myer spruiked a “leaner, more productive” strategy by announcing that it would be close 19 stores across Australia.
As part of further cost-cutting measures, Myer also cut another 50 jobs at its Melbourne headquarters at 800 Collins St last month, reducing its office footprint by more than 40% and vacating around four-and-a-half floors within the 10-storey, 30,000 sqm building.
Australian Property Journal
