Reject Shop in search to replace chief

The Reject Shop has hired executive search firm Trak Recruiting in its quest to replace outgoing chief executive Ross Sudano.

It was announced this month that Mr Sudano would leave the company after the listed retailer issued its third profit warning after he joined the company as its CEO in 2014.

The Reject Shop has suffered from crashing sales and profitability as online retailers steal market share in what is a low-margin sector of the retail industry aimed at customers in the lower socio-economic bracket.

Supermarkets and other discount department stores have become far more competitive and The Reject Shop is now expected to plunge up to $2m into the red while closing seven stores by July, taking its number of outlets to 357.

KPMG is also carrying out a review of the business.

Recruiters are expected to target former executives from major retailers such as Kmart, Coles, Woolworths and Target.

Last year, the group was subject to a takeover bid by a vehicle controlled by packaging mogul Raphael Geminder.

Mr Geminder’s company owns a 19 per cent interest.

His $2.70-a-share takeover bid for The Reject Shop in November was rebuffed by the board but since then the shares have collapsed to $2.10 in the wake of profit warnings and poor sales.

It is understood Mr Geminder has already identified a suitable candidate for the chief executive role, but that The Reject Shop is eager to embark on a search to ensure that the best candidate is chosen.

Meanwhile, department store chain Myer is expected to face close scrutiny in the months ahead as the South African-based Woolworths-owned brands, including Country Road, Witchery, Mimco, Politix and Trenery, leave the store to be sold only in its rival David Jones, which is also owned by Woolworths.

Brands from Britain and the US have been introduced to replace the outgoing merchandise, but their level of success is considered somewhat of an unknown.