Myer boss pushed out

Board forces Richard Um­bers to quit

Geelong Advertiser - - BUSINESS BEAT -

MYER’S chief ex­ec­u­tive Richard Um­bers has been forced to re­sign but the board is stick­ing with his turn­around strat­egy.

The trou­bled de­part­ment store’s chair­man Garry Houn­sell has been ap­pointed ex­ec­u­tive chair­man while a search for a new CEO takes place.

In­vestors ap­peared to wel­come Mr Um­bers’ exit with Myer’s shares up 5.6 per cent at 56.5 cents by lunch time yes­ter­day.

Mr Houn­sell said the board had asked Mr Um­bers, who was parachuted into the job three years ago, to step down af­ter the com­pany on Fri­day flagged a sig­nif­i­cant fall in first-half profit and warned of an im­pair­ment.

“We had dis­cus­sions with Richard im­me­di­ately af­ter the half-year an­nounce­ment and it was a mu­tual agree­ment that he should step down,” Mr Houn­sell said.

He said Mr Um­bers’ res­ig­na­tion was in share­hold­ers’ best in­ter­est, but he be­lieved the turn­around strat­egy – dubbed New Myer and which in­cludes a clear­ance floor – was the right strat­egy.

“The strat­egy is not un­der re­view ... I think it is all about ex­e­cu­tion of strat­egy and that is what I will be look­ing at very clearly,” Mr Houn­sell said.

He said the group’s fi­nan­cial sit­u­a­tion needed an ur­gent turn­around. But, he said, there would be peo­ple will­ing to take on the chal­lenge de­spite fierce op­po­si­tion to the New Myer strat­egy from ma­jor share­holder Solomon Lew.

“I think there will be peo­ple out there who will be in­cred­i­bly en­er­gised by this op­por­tu­nity,” he said. “I think we will get some very good can­di­dates.”

Mr Houn­sell de­clined to say whether Mr Um­bers’ res­ig­na­tion had been dis­cussed with Mr Lew or whether he thought it would help ease ten­sions be­tween the com­pany and its key stake­holder.

Mr Lew, who’s com­pany Pre­mier In­vest­ments took a 10.8 per cent stake in Myer in March 2017, has been highly crit­i­cal of the de­part­ment chain’s per­for­mance and on Fri­day called for fel­low share­hold­ers to “save the com­pany” with a board spill.

His call came af­ter Myer an­nounced its first-half net profit would likely be be­tween $37 mil­lion and $41 mil­lion, down from $62.8 mil­lion for the same pe­riod last year.

But that fore­cast ex­cludes im­pair­ments, the size of which is still be­ing cal­cu­lated.

Yes­ter­day, Mr Houn­sell said he did not be­lieve the im­pair­ment would put Myer at risk of go­ing into ad­min­is­tra­tion.

Myer in the past six months has an­nounced stores clo­sures, shed jobs and writ­ten down var­i­ous in­vest­ments as Mr Um­bers’ turn­around strat­egy failed to gain trac­tion against a back­drop of slug­gish con­sumer ac­tiv­ity and in­creased com­pe­ti­tion.

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