Myer’s future is racked with uncertainty after chairman Garry Hounsell resigned from the board and billionaire investor Solomon Lew said more heads had to roll.
Mr Hounsell told the ASX just hours before Myer’s annual general meeting that he was retiring, as Solomon Lew’s Premier Investments and Geoff Wilson’s Wilson Asset Management – Myer’s two largest shareholders – indicated they would not support his re-election.
“Ahead of today’s Myer AGM, it has become apparent that Myer’s two largest shareholders are not supporting my re-election and I will not allow my ongoing tenure as chairman to be a distraction to the hard work of the executive team,” Mr Hounsell said in a statement.
“In my three years as chairman, we have pursued a clear strategy that has strengthened the Myer business, allowing it to come through the severe disruption of the COVID-19 pandemic lockdowns to be well positioned as we head into the crucial end-of-year trading period.”
Mr Hounsell’s resignation came after Myer reported a full-year loss of $172.4 million in September as a result of virus-induced store closures.
But although the coronavirus lockdowns have wrought havoc for Myer, the 120-year-old department store was in deep trouble long before the pandemic.
Retail Doctor Group chief executive Brian Walker said Myer CEO John King had been swimming against an “irreversible current” since taking on the job in 2018 as department stores around the world had been in decline for decades.
But he thinks it’s “inevitable” more directors will be forced to step aside under pressure from Mr Lew.
“Simply put, we have seen globalisation, the growth of online, the growth of speciality retail. And those three factors alone have determined that department stores are no longer relevant in the scale and size that they developed,” Mr Walker told The New Daily.
“Department store demises really began when the likes of H&M, Zara, Uniqlo, all of these categories started opening their own stores. And the same is true of Mecca,” he said.
“A department store’s business used to be 30 per cent cosmetics and cosmetic-related products. And something like another 20-odd per cent at least was fashion … well, that just got sliced and diced.”
In a statement before Myer’s annual general meeting, Mr Lew said Mr Hounsell’s resignation had given hope to shareholders that more boardroom changes would be forthcoming.
He wants the entire board to step down and representatives from his company Premier Investments to take up several seats.
“In the interests of all shareholders, we expect the remaining Myer directors will now indicate their intention to step aside in an orderly manner or face an extraordinary general meeting at which they will be certainly dismissed,” Mr Lew said.
“Myer is an Australian icon and it requires a board with proven Australian retail credentials and commercial experience, including key skills in property, information technology, e-commerce and logistics.”
Mr Lew, who owns 10.8 per cent of Myer via Premier Investments, has been campaigning against Mr Hounsell since his appointment in 2017.
He has also called on CEO Mr King to resign after Myer announced its “disastrous and shameful” full-year results in September – complaining at the time that Mr King’s turnaround strategy was “in tatters”.
Mr King launched a campaign known as the Customer First plan in 2018 to reverse Myer’s dismal fortunes.
It led to significant cost cutting and encouraged a greater focus on exclusive product lines and online sales.
The department store chain said in May that it would accelerate its store closure plan after the pandemic cut its sales by 35.8 per cent.