Myer shares have tumbled after the dual resignations of its chief executive and chief financial officer triggered fears the department store giant will deliver a horror half year earnings result.
Bernie Brookes is leaving Myer after nine years at the helm of the struggling retailer, with supply chain boss and former supermarket executive Richard Umbers parachuted in as his replacement.
Mr Brookes’ exit coincides with that of chief financial officer Mark Ashby, who will leave in May for a job overseas.
News of their departures rattled investors, who pushed Myer’s shares down 20 cents, or 10.8 per cent, to $1.655.
Market analysts say the management shake-up just two weeks before Myer reports its half year earnings has stoked fears of a weak result.
“It suggests that the fact they have brought in Richard Umbers, giving him three weeks of clear air to tell the world that the results coming up on March 19 won’t be brilliant,” IG markets strategist Evan Lucas said.
But chairman Paul McClintock rejected the suggestion.
He said Myer had been carrying out a strategic review aimed at reshaping the business and it had become clear a new chief executive was needed to oversee the multi-year turnaround project.
“The board and management team have agreed that the transformation work has reached a pivotal point and it is appropriate for a new CEO to be given the opportunity to own, lead and drive the transformation program over the coming years,” he said.
Myer has been battling disappointing sales growth for several years amid weak consumer sentiment and growing competition both from online and international retailers.
Its first quarter sales for 2014/15 were flat and well short of market expectations of a 2.5-3.0 per cent rise, with womenswear particularly disappointing.
In his new role, Mr Umbers will be charged with overseeing a significant program of change, indicating the top level executive departures mark the start of a change in direction for the retailer.
Mr Umbers was executive general manager for Australia Post’s parcel and express services, where he led an ecommerce initiative designed to take advantage of the online shopping boom.
The 48-year-old Brit was also an Aldi executive in England before running the grocery operation of Woolworths New Zealand.
He moved to Australia in 2006 to take on the role as Woolworths’ general manager.
Speaking to reporters on Monday, he was reticent to give any details about how he’ll turn around Myer’s flagging sales.
“We are looking to reshape the business in response to changing customer behaviour and to make sure we are well positioned to take advantage of these changes rather than be knocked over,” he said.
Mr McClintock described Mr Umbers as a “lifetime retailer” with the right leadership and ecommerce skills for the role.
Mr Brookes wished him the best in revitalising the brand and building a sustainable business.
“It’s the right time for me to go because that would take a while, therefore signing on for extended period was not on my agenda,” he said.
Mr Brookes was reappointed as Myer’s boss in February 2014.
He had been due to retire in August that year, but the board extended his contract indefinitely so he could focus on a merger with rival David Jones – a deal that ultimately failed.