Richard Umbers has stepped down as CEO and managing director of department store retailer Myer.
In a market update, Myer said chairman Garry Hounsell has been appointed as executive chairman with immediate effect.
No replacement has been lined up with a search to commence immediately for a new CEO.
“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” said Hounsell in a statement.
“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,” Hounsell said.
Last week Myer flagged more writedowns after the department store chain’s sales fell by 6.5 per cent during its key Stocktake Sale period in January.
Shares in the troubled retailer fell to a fresh record low of 56.5 cents – down more than 50 per cent in a year – after it said sales for the six months to January fell 3.6 per cent following a poor performance over Christmas and the holidays.
Umbers will serve a 12 month notice period.
Hounsell’s “functions will be overseen by a committee of the board appointed for that purpose” during that period and be paid a salary to be determined by the board after taking external advice “as to the amount which is appropriate in the circumstances”, the retailer stated in its update.
Following Myer’s trading update last week, retail veteran and chairman of Premier Investments Solomon Lew – who as the retailer’s largest shareholder has been engaged in an ongoing war with Myer of its performance – said “shareholders must unite to save the company”.
“Incumbent board has failed”
On Wednesday, Premier Investments said “it is clear that the incumbent board has failed” in a statement following Myer’s announcement.
“It remains Premier’s view that Myer needs an experienced and performance-focused board capable of addressing the current challenges and fulfilling the potential of the Myer brand and business.
“It is clear from Mr Umbers’ departure that not only the Board-endorsed “New Myer” strategy, but also the “New, New Myer” strategy are dead and buried.
“Any remaining doubt that Myer is in peril should now be removed from the minds of all of shareholders.”
Premier said Myer chairman Hounsell “has demonstrated a total lack of judgement in the way he has acquitted himself in the role, and deserves neither to be appointed nor paid as executive chairman.”
Umbers’ departure is the latest in a long line of Myer executives jumping off the ship according to Premier, who said the business has lost all of its retail talent in the past two years.
“Hounsell’s announcement today raises more questions than it answers given the now Executive Chairman’s unqualified support for the New Myer strategy. It also demonstrates a complete failure of the incumbent Myer Board to adequately plan for succession.”
Premier said Myer “is in peril” and reiterated its commitment to creating a new board, with a majority of independent directors to be put to a vote of shareholders at an extraordinary general meeting.
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