Reich to the rescue for Reject Shop

Andre Reich will take the reins of embattled discount retailer The Reject Shop at a troubled time in the retailer’s history.

Andre Reich will take the reins of embattled discount retailer The Reject Shop at a troubled time in the retailer’s history, with its stores constantly reassessing which categories it should or shouldn’t be in, amid onerous leases, collapsing sales and a weakened share price.

The 25-year retail veteran, who has had stints at retailers Kmart, Target, Review Australia and Myer, will also begin his role fresh from the crucial Christmas and new year trading period and where consumers are holding back from spending and spoiled for choice from the sector with all discounters struggling.

The Reject Shop, which in August posted a $16.9m full-year loss and breached its banking covenants, has poached the Kmart and Target executive to become its new CEO from January 13.

Shares in The Reject Shop jumped on the news to end up 12.5 per cent, at $2.25 each.

Mr Reich is an experienced retailer with expertise in defining and delivering turnaround and growth outcomes, Reject Shop said, with more than 25 years of retail experience, most recently in the role of chief operating officer at Wesfarmers’ Target for three years and prior to that as general manager of merchandise and marketing at Kmart, also owned by Wesfarmers.

He will need all that retail experience to draw on. The Reject Shop has suffered through countless profit downgrades and seen its share price collapse from highs of almost $18 in 2010 to under $2 recently. In fiscal 2019 it breached its bank covenants and triggered $21.9m in writedowns. Its like-for-like sales growth has been negative or barely positive as the retailer bumps up against competition from other discount retailers Target, Kmart, Big W and Best & Less.

The chairman of The Reject Shop, Steven Fisher, said on Monday that Mr Reich was recognised across the market as a high-performing retailing executive with extensive experience in low-price retail formats.

“I am really pleased that Andre is keen to be part of the transformation of The Reject Shop as its next chief executive officer. Andre sees the opportunities that the future holds for the company as we return to our core focus of discount variety retailing.”

Andre Reich said: “Our future will include superior focus on our customer, fostering of a positive and proactive team culture and the delivery of sustainable commercial results.”

He will be paid a fixed remuneration of $800,000. The new CEO’s short-term incentives will see him eligible to receive bonuses with an on-target value of 40 per cent of his fixed remuneration and when he starts his role he will get a one-off allocation of 300,000 performance rights.

The Reject Shop was recently the target of a $78m takeover from billionaire Raphael Geminder, who is the retailer’s biggest shareholder with 19 per cent.