Woolworths board backs CEO after Australia expansion troubles

Woolworths Holdings Ltd’s board has expressed full confidence in chief executive officer Ian Moir even after the South African company took a $520mn writedown related to its 2014 acquisition of Australian retailer David Jones.

The food and clothing chain announced the impairment charge almost a year ago, in the wake of weak performance and a troubled reorganization plan at the Australia division. That’s contributed to a 16% decline in its shares this year, compared with an 11% drop on the FTSE/ JSE Africa General Retailers Index.

“It’s crystal clear that the executive management team is the best management team,” chairman Simon Susman said in an interview after the company’s annual general meeting in Cape Town recently. “I don’t think it is appropriate to say we are over the worst or not over the worst. We have come to the end of a very large and complex implementation programme, particularly in David Jones, which now needs to start bearing fruit.”

The Australian business has undergone a major transformation, including changing its merchandising and finance systems and online platform, added Moir. That’s starting to pay off as David Jones has begun to win market share over the past three months, he said.

“Are we through all the change we have to go through? No. We are certainly through the heavy lifting and the major change,” Moir said.