This article is from the Australian Property Journal archive
MYER has launched an international hunt for a new chairman, after pressure from its major shareholders Solomon Lew and Geoff Wilson forced Gary Hounsell to step aside just hours ahead of its annual general meeting.
The struggling department store had already decided to reduce the number of directors on its board last month under pressure from Wilson, after revealing a $172 million full year loss as the pandemic smashed in-store trading, despite a surge in online sales.
“Ahead of today’s Myer AGM, it has become apparent that Myer’s two largest shareholders are not supporting my re-election and I will not allow my ongoing tenure as Chairman to be a distraction to the hard work of the executive team,” Hounsell said yesterday.
Hounsell had been in the role for three years. Myer has been grappling with retail headwinds for some time, particularly the shift to online shopping, and its share price has been smashed.
Vocal major shareholder Lew, head of listed retailer Premier Investments, again called for the Myer board to be replaced yesterday.
“Mr Garry Hounsell’s resignation ahead of today’s Myer AGM is the ‘green shoot’ that Myer shareholders have long been waiting for,” Lew said.
“In the interests of all shareholders, we expect the remaining Myer directors will now indicate their intention to step aside in an orderly manner or face an extraordinary general meeting at which they will be certainly dismissed.”
Prior to the pandemic, Myer earlier this year flagged further space handbacks and store closures as its struggled in the difficult retail environment. Since July of 2018, it has closed or announced the closure of 29,000 sqm in store gross lettable area.
“In my three years as chairman, we have pursued a clear strategy that has strengthened the Myer business, allowing it to come through the severe disruption of the COVID-19 pandemic lockdowns to be well positioned as we head into the crucial end-of-year trading period,” Hounsell said.
“Our online business is going from strength to strength, with growth of almost 100% in the second half of FY20 to become one of the biggest and fastest-growing online retail stores in Australia, and the customer first strategy led by our CEO, John King, and the executive team sees our stores well-stocked and well- prepared for summer.”
Group online sales jumped by 61.1% to $422.5 million. All of its stores closed for most of April and May during the first round of nationwide lockdowns, and about 10,000 employees were stood down.
JoAnne Stephenson has been appointed as acting chairman while a search is undertaken to find a full-time replacement.
Meanwhile, ASX-listed retailer Mosaic Brands revealed it would be closing 250 stores by the middle of next year.
The parent company of Millers, Noni B, Rivers, Katies and Rockmans has already closed 73 stores since August “in response to unrealistic rental requests and a permanent shift towards online purchases”, according to chief executive officer Scott Evans.
Mosaic owns and operates nearly 1,400 stores across Australia. It became embroiled in a dispute shopping centre landlord which locked Mosaic out of 129 of its stores as part of a rent payment stoush.
A recent Deloitte Access Economics report warns extending the code of conduct could cost commercial property landlords as much as $14.9 billion, far exceeding any state or territory governments COVID-19 cash support.
Mosaic’s flagged between 300 and 500 store closures over the next 12 to 24 months when it announced a $212 million full year loss.
