Myer appoints new chief executive
Beleaguered department store retailer Myer has brought in British talent to steer its turnaround, appointing the former boss of UK department store House of Fraser, John King, as its new chief executive.
The move ends several months of uncertainty over the future of the department store after former chief Richard Umbers stepped down in February.
Announcing the appointment on Monday afternoon, Myer executive chairman Garry Hounsell, who has been overseeing day-to-day operations in an interim capacity, said King had been given a “full mandate” by the board to deliver financial improvement.
“John brings over thirty years of highly relevant retail experience across department stores, specialty retailing, premium global brands, wholesale apparel and discount retail,” Hounsell said.
Myer’s investors rallied in the hour after the announcement sending its shares up 4.8 per cent to 37 cents.
King was the vision behind the turnaround of House of Fraser in 2006, priming the business for sale to Chinese giant Sanpower for around £450 million in 2014.
He left the department store in early 2015 and has spent the last three years in the United States as a consultant for US-based retailers and has worked with various start-ups.
While in the US he invested in rugby heritage label Raging Bull with former House of Frasers CFO Stefan Cassar.
“I’m excited to lead this iconic Australian company, which like all global retailers, is facing significant change in both the retail environment and consumer shopping habits,” King said.
“I’m looking forward to the challenges and opportunities of this role.”
King started his career at UK supermarket giant Sainsbury in the early 80s before moving onto UK department store chain Marks and Spencer,
Prior to House of Fraser King led British fashion and homeware retailer Matlan’s portfolio of around 200 stores for three years.
King will be tasked with what is widely considered to be one of the toughest jobs going in Australian retail as Myer contends with digital disruption, growing irrelevance among customers and unfavourable leases.
Myer has booked three profit downgrades in the last year and last month incurred a $515 million write down.
King will also have to deal with major shareholder and recurrent critic Solomon Lew, who bought a 10.8 per cent stake in the business last year through Premier Investments and has engaged in a public battle to overthrow Myer’s board.
Myer provided no detail on strategy changes alongside the appointment announcement, but King’s approach to bringing House of Fraser back to the fore was to differentiate its product offering, pursue cultural change, reduce company debt and refurbish over 70 per cent of its 50+ stores.
“John understands fashion retailing and customers, particularly at department stores. He is an excellent candidate to lead Myer and I look forward to working with him to unlock the company’s significant potential and deliver shareholder value,” Hounsell said.
On the release of Myer’s half-year results last month Hounsell said he’s been pushing the team to “trade the business harder” and has taken steps to remain competitive by engaging in more product discounting.
While the department store retailer is several years into its New Myer turnaround strategy, which was envisaged by Umbers, King’s mandate to deliver change opens up the business to broader strategic changes.
King will be paid $1.2 million annually, including superannuation, with $900,000 in share rights that will be granted when he starts.
Short term incentives start from FY20 and include a maximum $960,000 bonus in cash and shares, subject to performance measures.
Long term incentives start from FY19 and include $1.4 million in performance rights under Myer’s long term incentive plan.
The appointment is subject to visa approval.
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