Departure of Bunnings CEO John Gillam a blow to Wesfarmers

John Gillam with 25-year employee Lyn French at the opening of a new Bunnings warehouse in Cairns.

John Gillam has made a call, decided not to chase the top job at Wesfarmers and less than 12 months after Bunnings’ expansion into the UK has quit the company.

No matter how you spin it, it’s not a good look for the company.

As the Wesfarmers board starts a two-day meeting this morning, past market confidence in the company will be shaken.

Woolworths has found renewed momentum in supermarkets, the bankers are searching for someone to buy the coal assets and now “Mr Bunnings” has walked.

Gillam was the one who would be held accountable for Wesfarmers’ UK Homebase acquisition and now he gone before the revamped business is even being rolled out.

As much as chief Richard Goyder maintains he will be held accountable for the acquisition’s success or failure, it was seen very much as Gillam’s project.

Now he will gone on a 12-month advisory stint with, it is said, a continued non-compete clause after that time.

Whether he lasts the 12 months or, like former Coles boss Ian McLeod, walks early, remains to be seen.

Richard Goyder is nearing the end of his term as Wesfarmers chief executive and Gillam was a hot favourite to take the job.

Those in the know say he was given no indication that he would not get the job, but has simply decided he didn’t want it.

That’s the official line and, in his absence, Rob Scott has become the clear favourite for the top job with CFO Terry Bowen an outside chance.

A decision will be made in the next 12 months to appoint someone, presumably now Scott, as deputy managing director, with a handover period before Goyder leaves.

Wesfarmers maintains the $700 million acquisition of the UK’s Homebase home improvement chain is going fine and all is ready for the opening of its first revamped store at St Albans, north of London, early in the new year.

Long-time Bunnings deputy Peter Davis will continue to run the UK for the next three years at least and Mike Schneider will run Australia.

Both are clearly capable but after 12 years at the helm and 20 years at Wesfarrners, Gillam has for some reason had enough.

The only logical explanations are that he either lost interest in the top job, or was told he wasn’t going to get it.

The latter reason is rejected by the Perth-based company.

Instead it is said Gillam has other plans and with two children still at school in Melbourne wanted to maintain his focus on Australia’s east coast.

It is also said Gillam will be spending more time in the UK now he has stepped back from management.

Either way it’s not a good look for the company to lose a star executive at this stage in its development.

Wesfarmers chair Michael Chaney first hired Gillam as company secretary 20 years ago and put him in charge of Bunnings 12 years ago to help Davis with the business.

Chaney now has to move quickly to settle uncertainty over the company’s future leadership.