Mark McInnes to step down as CEO of Premier Investments

Solomon Lew is looking for a new Premier CEO after Mark McInnes said he’d leave in 12 months for ‘personal reasons’.

Premier Investments CEO Mark McInnes, left, with Chairman Solomon Lew. Picture: David Geraghty

Veteran retail executive Mark McInnes will pull off a rare feat in corporate Australia by choosing the timing of his exit from a decade leading Solomon Lew’s Premier Investments and leaving behind him record high profits and share price.

Under his watch Premier Investments has developed a flourishing overseas network of stores for its Smiggle brand, turned around once struggling brands such as Just Jeans and Portmans, and built a state-of-the-art warehouse and online fulfilment centre that has supercharged the retailer’s delivery through COVID-19 and generated growing sales and earnings.

Along the way, thanks to a booming share price, Mr McInnes has struck the kind of wealth not many CEOs enjoy, and retains a 0.62 per cent stake in Premier Investments valued at more than $23.3m

Mr McInnes has also enriched his friend and chairman Mr Lew, whose personal and family stake in Premier Investments has more than quadrupled to $1.62bn since he took the helm, with other shareholders also enjoying the ride.

Where the corporate landscape is littered with CEOs who have overstayed their welcome, enjoying some early success but then in their remaining years watching as profits slipped away and share prices nose dived, Mr McInnes has decided to bow out at a high and spend more time with his young family.

Mr McInnes has two children under 10, and is not at this time seeking a new corporate role. Even if he wanted to, Mr Lew is dangling some golden handcuffs with a two year non-compete clause — that would block him from most retail roles — on top of the 12-month notice period the Premier CEO has now issued.

A former chief executive of David Jones who was given a lifeline by Mr Lew in 2010 when he was ejected from the up-market department store following admissions of inappropriate behaviour towards a staff member, Mr McInnes has helped make Premier Investments one of Australia’s most successful fashion retailers, with strong profits and a successful overseas arm.

The share price under his leadership has almost risen five-fold.

And Premier Investments, whose chains include Smiggle, Portmans, Dotti, Just Jeans and Jacqui E, has not missed a beat through the COVID-19 pandemic, with the retailer notching up record sales growth thanks to a purpose built warehouse and online fulfilment centre that was formulated by the outgoing CEO.

But now Mr Lew will need to find a new CEO to lead his $3.77bn publicly listed retail empire, with Mr McInnes announcing his intention to step down from the business in 12 months time.

He goes out on a high. Only last week Premier Investments unveiled record half-year guidance, flagging an 85 per cent increase in earnings before interest and tax to between $221m and $233m for the first half of the financial year.

Shares in the company closed at a record $25.35 on Wednesday, up 12.7 per cent on the back of the upbeat guidance.

On Monday, as investors digested the news, the share price only weakened slightly, falling 56c or 2.3 per cent to $23.75.

Mr Lew said on behalf of the board he had expressed his sincere appreciation to the outgoing CEO.

“Premier has delivered year on year record operational and financial performance under Mark’s leadership. We have thrived in very challenging times while many of our competitors have struggled or failed.

“In discussions with Mark, he indicated his desire to commit more time to his family than the demands of his role allow. After a decade in the CEO role, I understand and fully support Mark’s decision to leave for personal reasons.”

Mr McInnes is subject to a 12-month notice period. In addition, Premier Investments has the option to restrain Mr McInnes from engaging in specified retail related activities for a further two-year period.

Mr Lew said: “At this time, it is business as usual. The board has commenced a process to ensure an orderly transition, including a comprehensive search. Mark is currently on well-deserved annual leave and will be returning on February 1, 2021.

“I, and the senior executive group, look forward to continuing to work with Mark during his notice period and working towards delivering a very strong full year result for 2021.”

Wilson Asset Management lead portfolio manager Oscar Oberg said Mr McInnes was highly respected in the retail sector and was viewed as a key driver of Premier Investments’ success, however, the company had strong executives that would help drive the company forward as well as one of the best retailers in the country watching over them, Mr Lew.

“They have a number of strong individuals running the brands across the organisation so I think while Mark is an incredibly good CEO, there is no doubt about it and it is a loss, it has a lot of good people there.

“And obviously Solly Lew as chairman as well is one of the best retailers in Australia, probably the best.

“I don’t think much of the strategy will change that much, I think there are a lot of people in the organisation who can take over and do a very good job.”

Mark McInnes left David Jones after admissions of inappropriate behaviour.

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