Former Qantas loyalty boss Olivia Wirth tapped as new Myer executive chairman

The former Qantas loyalty boss Olivia Wirth has spectacularly emerged as Myer’s new executive chairman, as part of a major board shake-up of the nation’s largest department store.

Olivia Wirth has been appointed the new executive chairman of Myer.

Olivia Wirth, the ex-Qantas loyalty boss who narrowly missed out on the airline’s top job, has emerged with unprecedented power at Myer after being named executive chairman of the department store - a Myer role that hasn’t existed for 15 years - and handed full authority to drive a new growth agenda.

At the centre of that agenda will be fashioning the already potent Myer loyalty scheme, called Myer One, which as 4.3m members, into an even more powerful sales and profit generator to rival some of the most successful and valuable loyalty schemes in the corporate world, including that of her former employer Qantas.

Ms Wirth will take the reins at Myer on June 4 after a handover from current chief executive John King who is credited with a stunning turnaround of the once embattled and loss-making business. However, she won’t be relocating to Melbourne from her current home in Sydney for the role at the historic Melbourne retailer but will rather opt to fly down to work at the Docklands headquarters through the week.

While Ms Wirth is long in experience in airlines and running loyalty schemes she has almost zero experience as a shopkeeper. But Mr King defended the board decision on Thursday to elevate her to the top of the department store chain which has annual sales of $3bn, saying that she would have a full management team behind her to make the key decisions around fashion, labels and merchandise.

“It’s not the CEO’s job to pick out the socks and underpants,” Mr King told The Australian.

“We have a very capable team of buyers, merchandisers, designers in here. I don’t sit in product meetings anymore, I don’t need to, we have a management team who know what they are doing.”

The unexpected boardroom upheaval at the 124-year old Myer announced on Thursday was done with the full blessing of its biggest shareholder, billionaire Solomon Lew, and has seen Myer’s current chairman Ari Mervis immediately walk out of the company and a key Lew ally, business partner and friend, corporate raider Gary Weiss, appointed deputy chair. Mr Mervis had been on the Myer board for three years and was only just made chairman in November, with his swift exit unexplained by the company and seen as even more evidence of the unprecedented power within the Myer boardroom that Ms Wirth now will wield.

It is believed that for Mr Lew, the billionaire whose Premier Investments fashion empire owns 28.79 per cent of Myer, the new role of executive chairman was viewed favourable as he is more focused on outcomes and Myer returning to its historic role as a successful and highly profitable retailer on the Australian retail landscape. With Ms Wirth having this level of power on the board not seen since it was in the hands of private equity and as head of management she should be able to make decisions more quickly and have them implemented at a cracking pace and at a time when the world of retail is changing and evolving at a lightning fast pace.

In a mark of the responsibilities and power that lay now in her lap, and handed over to her by fellow Myer directors, and Mr Lew, she will be Myer’s first executive chairman since it listed on the ASX in November 2009. To prepare for its return to the public market its then private equity owners separated the roles of chairman and CEO to restructure for the float and adopt conventional public company governance boardroom roles.

The Myer board has now thrown convention and caution to the wind to hand Ms Wirth, who has no retail experience, full control of Myer but she will have a strong team in support including Dr Weiss, the elevation of 30-year Myer veteran Tony Sutton to a new position of chief operating officer and recently appointed chief financial officer Matt Jackman.

However, her lack of direct retail experience wasn’t a hindrance for the Myer board with Mr King defending the decision on Thursday and arguing the combined role of an executive chairman was the right structure in place to push the next phase of growth for the retailer.

It was Ms Wirth’s in-depth knowledge and experience in running a loyalty scheme that was key, he added, and the right type of skills needed for a retailer focused on the future.

“The focus now is really on how we ramp up that whole data, digital, customer loyalty piece. And if you look at the airline industry, you know, it’s one of the most customer focused industries in the world. We have a very strong team in place here in terms of retail, in terms of products, in terms of all the aspects of retail in this business.

“This (decision) was about leadership, and about appropriate skill sets to the next generation of the customer first plan. It’s all about loyalty, e-commerce and data analytics,” Mr King told The Australian.

“So if you look at our results over the last few years, and just recently, over three quarters of our sales are through our loyalty program … that’s the reason why we’ve grown our market share … why our current trade is better than most out there. We give people a real reason to shop with us. And that’s what it’s about. It’s about the leadership skills we need.”

On Thursday Myer also released its first half results, which were overshadowed by the boardroom coup, and while it posted a 22.4 per cent slide in its interim net profit to $50.5m and a small dip in sales to $1.83bn it is still in the strongest financial and operating position it has been in decades. Myer is quickly gaining market share from rivals, sitting on cash reserves of more than $211m and now eyeing off a loyalty scheme that is driving three quarters of its sales and which the board now believes can become a highly valuable asset and business within Myer, just as it is for Qantas.

When Ms Wirth stepped down as CEO of the Qantas Loyalty business late last year, as part of the airline’s own upheaval which also cost the jobs of its then CEO Alan Joyce and chairman Richard Goyder, she had led the loyalty scheme for five years and been at Qantas for 14 years.

What Myer directors and investors are salivating over is the opportunity for Myer to mirror the success of the Qantas frequent flyer business that last year, under Ms Wirth’s guidance, reported underlying earnings of $451m as Frequent Flyer membership increased by around 1m to 15.2m with 19 per cent growth in the Qantas Business Rewards program.

“I am honoured to lead one of Australia’s iconic businesses and brands into a new and exciting phase,” Ms Wirth said.

“ Myer is loved by millions of Australians and is one of the nation’s most enduring retailers thanks to the dedication and skill of our team members, and the loyalty of our customers.

“The next chapter in Myer’s story requires us to continue tackling some significant challenges and meet the changing needs of our customers. I am focused on delivering improved outcomes for our valued customers, team members and all Myer shareholders.

“My immediate priorities will be ensuring we are delivering a great in-store experience with a world-class range and best-in-class customer service, while investing in e-commerce and harnessing loyalty and partnerships among our customers and suppliers.”

Mr King said he had begun walking the Myer stores with Ms Wirth when she was appointed a director of the retailer in November and would continue to be heavily involved in the transition period as she assumes the role as executive chairman.

A spokesman for Mr Lew’s Premier Investments said the shareholder welcomed her appointment and wished her the best in the role.

Former Qantas executive Olivia Wirth has been tapped to lead Myer. Picture: Damian Shaw

Originally published as Former Qantas loyalty boss Olivia Wirth tapped as new Myer executive chairman