Booted Myer chair Ari Mervis missed out on Mark McInnes, then chose Olivia Wirth

Exited Myer chairman Ari Mervis came close to clinching former Premier Investments and David Jones boss Mark McInnes but fell short and then turned to ex-Qantas boss Olivia Wirth.

Former Myer chairman Ari Mervis, who left last week, anointed executive chairman Olivia Wirth and current Myer boss John King.

The recently departed Myer chairman Ari Mervis was in advanced negotiations with former Premier Investments and David Jones boss Mark McInnes to take over as the new chief executive of Myer, The Australian can reveal.

When those talks collapsed the board turned to alternatives, opting for the ultimately successful candidate, former Qantas loyalty chief Olivia Wirth.

Mr McInnes ran Solomon Lew’s publicly listed fashion empire Premier Investments for a decade and transformed it into a highly successful and profitable portfolio of retail chains.

He would have been a prize catch for Myer given his extensive department store experience at DJs, as well as setting up a reunion with Mr Lew, who is Myer’s largest shareholder.

However, Mr Mervis and Mr McInnes ultimately could not agree on terms, according to internal Myer documents.

As negotiations were drawn out into early January the former David Jones boss and Lew ally accepted a job running the fashion, retail and investment vehicle for Monaco-based billionaire Brett Blundy.

Mr Mervis, on behalf of the Myer board, had been negotiating with Mr McInnes through Christmas and the new year.

But the remuneration package Mr McInnes was asking for was a sticking point, given what Myer directors could justify to shareholders.

Internal Myer company documents sighted by The Australian show Mr Mervis contacted Mr McInnes on or around January 10 with a “term sheet” that was in essence an agreement to continue to negotiate the terms and conditions to snare the experienced ­retailer.

It was viewed by the Myer board as a non-binding term sheet, but there were hopes he would sign on to be the next Myer CEO.

However, from the start of talks Mr McInnes’ remuneration package was substantial, and it continued to climb as negotiations between Mr Mervis and Mr McInnes progressed.

Mr McInnes was asking for remuneration similar to what he earned when he ran Premier Investments for Mr Lew, sources told The Australian, which could have been $6m a year or more, when including incentives and share options.

There was some boardroom unease at how much Myer could pay a CEO, given the department store chain had only recently survived a near-death experience as its losses blew out and its share price crashed, with it only now sitting on $211m cash and a gold-plated balance sheet.

Mark McInnes with Premier Investments chairman Solomon Lew. Picture: Aaron Francis

Some Myer directors were also concerned about bringing in an outsider, arguing at boardroom meetings that the current team around Myer CEO John King was the right one to take Myer forward and would rather have an insider promoted.

When it was announced in late January he had taken up Mr Blundy’s job offer, Myer’s talks to bring over Mr McInnes were dead in the water.

A collapsed deal to bring Mr McInnes to backed Myer is believed to have ultimately played into the shock exit of Mr Mervis from the board last week, as part of the boardroom coup that saw Ms Wirth, who was only appointed a Myer director in November, handed the powerful role of Myer executive chairman.

It is believed Mr Lew, who through his Premier Investments company has a 28.79 per cent stake in Myer, withdrew his support for Mr Mervis to remain chairman as a wider restructure of the board – including the elevation of Lew confidant Gary Weiss to Myer deputy chairman – was engineered.

It was only in November that Mr Lew had given his blessing for Mr Mervis to become Myer chairman but by March he was gone. Mr Mervis had hoped to also have some viable CEO candidates for offer via recruitment firm Egon Zehnder, which had been working with the

New Myer executive chairman Olivia Wirth. Picture: John Feder

Myer board for a year looking for a replacement for Myer boss Mr King, as he signalled he would be planning to retire in 2024. But The Australian has been told the hoped list of promising CEO candidates didn’t impress some Myer directors and major shareholders.

Tony Sutton, a 30 year veteran executive of Myer, was also considered at one time a candidate to take the top role, but there was not overwhelming shareholder support for that move and instead he was elevated to a new position of chief operating officer to provide further support to Ms Wirth.

Myer directors believe that despite her lack of retail experience, she excels in customer loyalty, and that a pillar of discretionary retail currently is customer engagement, which she has great experience in.

A spokesman for Myer said the recruitment process was confidential and not something the department store owner would comment on. A spokeswoman for Mr Lew and a spokesman for Ms Wirth also declined to comment. Mr Mervis did not return phone calls.

It comes as Ms Wirth, who ran the Qantas Frequent Flyer scheme for five years and was with Qantas for 14 years, begins her retail education to prepare for taking the reins of the 124-year-old Myer in June. That handover from current Myer boss Mr King will be slightly interrupted, however, as Mr King is spending three weeks overseas between now and when Ms Wirth officially begins her role.