New Myer chair Garry Hounsell takes fight to Solomon Lew

Garry Hounsell is supportive of CEO Richard Umbers’ ‘New Myer’ strategy.

Incoming chairman Garry Hounsell at Myer’s Bourke Street store in Melbourne yesterday. Picture: David Geraghty.

Incoming Myer chairman Garry Hounsell is supportive of CEO Richard Umbers’ pitch to resuscitate the sales and profits at the department store operator by shutting underperforming stores and investing in digital, after reviewing Mr Umbers’ “New Myer” strategy before agreeing to accept the role.

Mr Hounsell, who said he did not want to dwell on the brutal and sometimes personal war of words between Myer and its biggest investor, retail billionaire Solomon Lew, said he was a fan of the Myer clearance stores that Mr Lew has rubbished as selling stock that belonged in the Salvation Army.

In an interview with The Australian yesterday after Myer announced that incumbent chair Paul McClintock would retire after the annual meeting next month, the former Ernst & Young partner and owner of Toolangi Vineyards in the Yarra Valley scorned suggestions the Myer board lacked retail experience at a difficult time for the sector.

“A well-constructed board actually comprises a diversity of skills and experience, and certainly I believe the Myer board has that requisite diversity of skills and experience,’’ said Mr Hounsell, who is also on the boards of Dulux and Treasury Wine Estates and is chairman of travel agency Helloworld.

“I’m a strong believer that the chairman of a board does not need to have the industry ex­perience of that particular ­company.

“Having said that, I do have some retailing experience. I am on the board of Dulux and we have some 60-odd retail stores across Australia and PNG, and I’m chairman of Helloworld where we have 1800 retail stores across Australia.”

A lack of retail experience was used as a battering ram by Mr Lew and his Premier Investments — which in March spent more than $100 million to snare a 10.8 per cent stake in Myer — to attack the retailer and Mr McClintock and demand a “seat at the table’’ over Myer’s future.

“I’m the first one to acknowledge that I’ve never run a department store or specialty store or whatever,” Mr Hounsell said.

“But I go back to my first point that a board needs to have a diversity of skills and that’s what this board has.’’

The decision to bring forward an announcement that Mr McClintock would not seek re-election after five years as chairman and retire from the board might be seen as a scalp for Mr Lew and his campaign to agitate for board renewal.

Reflecting on the past month of bruising encounters that has seen leaked emails, photos, personal attacks and a withering assault from Mr Lew accusing the Myer board of misleading shareholders on its financial performance, Mr McClintock said he was disappointed in some statements made by Mr Lew and his side.

This was particularly the case when Mr Lew, in a briefing with analysts and the media, derided Myer’s clearance stores format as selling clothing that belonged in the Salvation Army.

“I think it’s fair to say ... it hasn’t been personal on my side. We have played it by the rules,’’ Mr McClintock said.

“Obviously there were a few remarks ... that have disappointed me. The most disappointing part was not anything to do with me personally but the discouragement to our customers to go and test out our clearance stores, and bringing a reputable charity into the mix in order to get a headline. I thought that was a low point.”

Turning to Myer’s future, Mr Hounsell said he had spent time in Myer’s flagship store in the Melbourne CBD last weekend and reviewed the New Myer strategy, and thought it was the right path to follow.

“In my decision-making process on whether I would accept this appointment ... my analysis of the New Myer strategy was actually very important and what I can tell you is that I am comfortable that the strategy is on course,’’ Mr Hounsell said. “There are elements that make incredible sense, the digital focus and omni-channel is really an imperative, closing of certain underperforming stores is, likewise, imperative, the clearance floors are working.

“I believe in the strategy. It doesn’t mean that there won’t be tweaks but in terms of the overall thrust I’m very supportive and it was part of my decision to join the board.’’

Despite the combative tussle with Mr Lew, Mr Hounsell said he would be happy to meet the billionaire.

“I will meet with all of our shareholders, anybody that would like to meet with me I will meet with them,’’ Mr Hounsell said.

A spokeswoman for Mr Lew said he declined to comment.