New CEO for Myer

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By Published On: April 24, 20180 Comments

The wait is over. Will UK retail veteran John King be able to change the course of Myer's future with his appointment as CEO?

After months of uncertainty and speculation, Myer has announced the appointment of John King as its new CEO. King is the former boss of British department store House of Fraser. Myer’s previous CEO and managing director, Richard Umbers, stepped down from his role in February amid continued underperformance and leadership concerns.

Chairman Garry Hounsell, appointed as executive chairman and tasked with overseeing Myer’s day-to-day activities, announced the appointment on Monday.

“John understands fashion retailing and customers, particularly at department stores,” said Hounsell. “He is an excellent candidate to lead Myer and I look forward to working with him to unlock the company’s significant potential and deliver shareholder value.”

Shareholders responded positively to the news, with the announcement sending its shares up 4.8 per cent to 37 cents

“Over the course of his tenure at the House of Fraser, John and his team consistently grew revenues, differentiated the product offering and launched a successful online business, improved EBITDA and reduced the company’s debt,” he said. “They also refurbished more than 70 per cent of the property portfolio and implemented a vision, values and culture program.

In 2006, King saw the successful turnaround of House of Fraser, culminating in a sale to Chinese conglomerate Sanpower for around £450 million in 2014. King left House of Fraser in early 2015 and has since been consulting in the US. Since the Sanpower acquisition, House of Fraser has faced similar struggles to Myer, with KPMG now engaged to advise the retailer in relation to possible store closures and potential restructuring and job losses.

King’s base pay will be $1.2 million a year, a $900,000 sign-on bonus in the form of share rights, and could earn short-term incentives worth 80 percent of his fixed salary and long-term incentives equivalent to 117 percent if relevant performance measures are achieved.

While the appointment has been met with a positive response, there is no word yet from major shareholder Solomon Lew, who has been very vocal in his criticisms and desire to overthrow Myer’s board.

With Myer’s poor performance and sales losses plunging it on a downward spiral in recent years, there is no doubt that King has a huge job ahead of him.

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Heather Bone