Myer CEO exits: Richard Umbers forced out, chairman Garry Hounsell to take reins

MYER chief Richard Umbers has dramatically been pushed out. The struggling department store chain has announced today that Mr Umbers is stepping down with immediate effect.

MYER chairman Garry Hounsell says the ailing department store’s turnaround strategy is the right one but its next chief executive will be given free rein to review the plan.

The retailer stunned the market yesterday by announcing it was parting ways with chief executive Richard Umbers just five days after issuing its third profit downgrade in less than a year.

RETAIL BILLIONAIRE PLOTS MYER BOARD SPILL

MYER SHUFFLES EXECUTIVES, CUTS JOBS

Mr Umbers’ exit adds to the executive carnage at Myer, which has also jettisoned its deputy chief executive and chief financial officer in the past eight months.

Myer chief Richard Umbers has abruptly left the business. Picture: Aaron Francis.

It drew immediate fire from Myer’s disgruntled major shareholder, retail magnate Solomon Lew, who said it represented “a total lack of judgment” and “complete abdication of responsibility” from the board.

Mr Hounsell, who joined the Myer board in September, will also serve as chief executive while a successor to Mr Umbers is found.

The former Spotless chair said he asked Mr Umbers to leave following Myer’s profit warning last week, which sent its share price to an all-time low.

Previously, Mr Hounsell had strongly backed Mr Umbers — who will remain on the payroll for the next year — as the right person to revive Myer.

“The result we issued for the first half is not acceptable — that is why we acted decisively here and we will continue to act decisively,” Mr Hounsell said on Wednesday.

“We are impatient for a turnaround in the company’s performance and the board has determined that it is in the interests of all shareholders for there to be a fresh approach to drive our future direction.”

New Myer chairman Garry Hounsell is also taking the executive reins while the retailer searches for a new chief. Picture: David Geraghty

A former Australia Post executive, Mr Umbers took over as chief of the retailer in March 2015, when Myer ousted Bernie Brookes.

Mr Umbers has been the driving force behind a five-year, $600-million turnaround strategy designed to restore the fortunes of the department store chain. More than two years in, the blueprint is yet to halt a slide in profit and the retailer’s share price.

Mr Hounsell again threw his weight behind the plan on Wednesday, saying it remained sound but its rollout needed to be “turbocharged”.

But he conceded any new chief would be given free rein to review the plan, which Myer’s biggest shareholder says has failed.

“I’m comfortable with the strategy — its execution and urgency that is the key matter,” Mr Hounsell said.

“I think it’s the right strategy but I’m also open to someone new coming into the business to question it.”

Retail billionaire Solomon Lew, right, with Premier Investments chief Mark McInnes, wants to overthrow Myer’s board.

Mr Lew, whose Premier Investments retail vehicle is Myer’s biggest shareholder, said the latest ructions at the department store should remove “any remaining doubt that Myer is in peril” from the minds of all shareholders.

“Mr Hounsell lacks the retail industry experience to be the chairman of Myer, let alone to be its CEO,” Premier said in a statement.

“His appointment should give great concern to all of Myer’s shareholders, customers, employees and suppliers.”

Premier is sounding out major shareholders to help nominate a rival board, which it plans to put to Myer shareholders at an extraordinary general meeting.

Myer is expected to announce major writedowns when it releases its first-half results next month — an update that could provide the trigger for Premier to call such a meeting.

Shares in Myer closed 1c, or 1.9 per cent, higher on Wednesday at 54.5c.

[e-mail]