By Millie Muroi
Myer boss John King will retire in the second half of 2024 and return to the US after more than doubling the department store chain’s profit in the five years he has helmed the business.
King’s decision to move on was based on his wish to be “with his family as their health circumstances demand”, the retailer said in an announcement to the ASX on Monday morning.
Myer CEO John King will return to the United States next year after more than five years in the role.
Myer chair JoAnne Stephenson thanked the executive for his “extraordinary contribution to the company” and said that at the end of King’s more than six-year tenure next year, he will have delivered a “remarkable turn-around in the positioning and performance of the business”.
When King took the top job in 2018, his former colleague Mark Gifford, then chief financial officer at the upmarket British department store House of Fraser, described it as “the suicide job.”
Myer’s sales and earnings had fallen dramatically as consumers increasingly shifted towards specialty traders and online shopping, and the company’s balance sheet was stretched to the limit. Its share price had shed half its value in the year leading up to his appointment.
Soon after he joined the business, King established Myer’s “customer first plan” – focused on transforming the in-store shopping experience, reducing floor space and cutting costs. The plan, which reduced overall floor space by 11 per cent, saw Myer return to paying regular dividends to its shareholders.
In March, the department store giant posted a profit of $65 million for the half – its best result in nearly a decade and double the full financial year result in 2018. The company said then that it would chase $1 billion in annual digital sales.
During most of King’s tenure, billionaire retail veteran Solomon Lew pressured Myer’s board over concerns about the department store’s underperformance. The rag trade billionaire now has a 25 per cent stake in the business and recently installed former Myer Grace Bros boss Terrence McCartney on the board as his representative.
Lew’s company Premier Investments didn’t reply to a request for comment on King’s departure and the search for a successor.
Myer’s shares declined on the news, closing 0.7 per cent lower at 67 cents while the wider market rallied, with the benchmark S&P/ASX 200 gaining 1 per cent in Monday’s trading session.
Wilson Asset Management lead portfolio manager Oscar Oberg said that while he would have liked King to stay, the chief executive had achieved what he set out to do, and more.
“When he came in, the business was in terrible shape, and he’s done a really good job of cutting costs, getting the right brands in store, improving customer services and reducing inventory levels,” Oberg said. “People thought Myer had a balance sheet problem about two or three years ago, and now they are hardly using their debt facility, have plenty of cash and are paying dividends.”
Oberg said there wasn’t a clear successor for King within the business, but that the CEO position would likely receive no shortage of interest.
“There are numerous high-quality retail executives out there at the moment and there’s an opportunity for Myer to get back to the glory days,” he said. “The turnaround of the business is largely done, so I imagine the CEO position would be highly sought after.”
King’s performance at Myer shares parallels with his previous role at House of Fraser, where he was credited by some for the UK company’s turnaround. Just as he took Fraser online and steered it through the global financial crisis, the businessman bolstered Myer’s online presence and guided it through the pandemic.
King said he was confident in Myer’s people and future, but there was work yet to be done. “I am proud of what we have achieved so far with lots more to do, so it will be a busy year ahead,” he said.
The company said the fact that King would not depart for over a year would enable it to conduct a thorough local and international search for his successor.
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