Wool­worths names SA high-flyer Roy Ba­gat­tini to re­place Ian Moir

Business Day - - FRONT PAGE - Karl Ger­net­zky Mar­kets Writer ger­net­[email protected]­nesslive.co.za

MAR­KET PAR­TIC­I­PANTS MAY FEEL MR BA­GAT­TINI MAY BE MORE OPEN­MINDED IN TERMS OF CON­SID­ER­ING THE GROUP’S OP­TIONS WITH DAVID JONES

MAN­AGE­MENT WOULD NOW PROB­A­BLY BE LASERFOCUS­ED ON AR­EAS THAT IT COULD CON­TROL AND RE­CLAIM MAR­KET SHARE, SAYS AN­A­LYST

Wool­worths has ap­pointed a top ex­ec­u­tive from US fash­ion group Levi Strauss to re­place group CEO Ian Moir, whose reign has been over­shad­owed by the re­tailer’s dis­as­trous foray into Aus­tralia.

An­a­lysts said Moir’s de­par­ture on Tues­day af­ter more than nine years at the helm was un­sur­pris­ing given the per­for­mance of the re­tailer’s David Jones depart­ment store chain in Aus­tralia, which has seen its value writ­ten down to less than half of what Wool­worths paid for it.

The news sent Wool­worths’ share price soar­ing 8.3% higher to close at R52.20, its big­gest one-day gain in more than six years. The shares are now trad­ing at just less than half of a record high of R108 reached in Novem­ber 2015.

The lat­ter years of Moir’s time at the re­tailer were dom­i­nated by in­vestor dis­sat­is­fac­tion over the group’s in­vest­ment in Aus­tralia through David Jones, for which Wool­worths paid about R21bn in 2014. Its val­u­a­tion stood at about R9.6bn at the end of June 2019.

Moir, who was made CEO in Novem­ber 2010, will be re­placed by South African Roy Ba­gat­tini, ex­ec­u­tive vice-pres­i­dent and pres­i­dent for Levi Strauss Americas. Ba­gat­tini has held ex­ec­u­tive roles at SABMiller in­ter­na­tion­ally and in SA.

“Mar­ket par­tic­i­pants may feel that Mr Ba­gat­tini may be more open-minded in terms of con­sid­er­ing the group’s op­tions with David Jones, be­cause he’s not as close to the ac­qui­si­tion as Moir was,” said Sas­fin Wealth se­nior eq­uity an­a­lyst Alec Abra­ham.

Wool­worths, like other JSElisted re­tail­ers, had prob­a­bly al­ready been ag­gres­sively re­view­ing its store es­tate and ex­pan­sion plans in re­sponse to con­tin­u­ing, al­most nonex­is­tent vol­ume growth in the SA mar­ket, as well as con­sumers get­ting poorer over the years and the ef­fect of on­line re­tail­ing, Abra­ham said.

Gryphon As­set Man­age­ment an­a­lyst Cas­parus Treur­nicht said, how­ever, it was un­fair to put the blame on Moir as the David Jones ac­qui­si­tion had been fully backed by the board and share­hold­ers at the time.

Man­age­ment would now prob­a­bly be “laser fo­cused” on ar­eas it could con­trol and re­claim mar­ket share, said Treur­nicht. Fash­ion had been a weak spot for Wool­worths in re­cent years.

Wool­worths said on Tues­day that in ad­di­tion to lead­ing many merger and ac­qui­si­tion projects dur­ing the course of his ca­reer, Ba­gat­tini had spear­headed the turn­around of sev­eral com­pa­nies and suc­cess­fully driven their growth and ex­pan­sion.

“Roy has ex­ten­sive op­er­a­tional, man­age­ment and turn­around ex­pe­ri­ence in global con­sumer and re­tail mar­kets, which will prove in­valu­able as we con­tinue to nav­i­gate the struc­tural changes tak­ing place in the re­tail sec­tor and the challenges par­tic­u­lar to our group,” said Wool­worths chair

Hu­bert Brody. Ar­gon As­set Man­age­ment eq­uity an­a­lyst Bjorn Sa­muels said that David Jones aside, the Wool­worths group had per­formed well un­der Moir. The David Jones ac­qui­si­tion had shifted man­age­ment fo­cus away from the group’s core SA busi­ness, “caus­ing Wool­worths to score some own-goals in the lat­ter part of his decade-long ten­ure”.

/lev­is­trauss.com

Levi man: Levi Strauss ex­ec­u­tive vi­cepres­i­dent and pres­i­dent for Americas Roy Ba­gat­tini has been ap­pointed as Wool­worths CEO, re­plac­ing Ian Moir.

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