Former David Jones boss Mark McInnes has staged a remarkable corporate comeback, joining Solomon Lew’s Premier Investments as head of its retail business, just six months after settling a sexual harassment case with a former David Jones staffer.
McInnes, who caused a sensation in June 2010 when he resigned after admitting he acted “in a manner unbecoming of the high standard expected of a chief executive officer to a female staff member”.
The female staff member, publicist Kristy Fraser-Kirk, would later launch a $37 million damages claim against McInnes, David Jones and the company’s directors.
The case was settled in mid-October for about $850,000. Reports at the time suggested McInnes paid about half of that amount.
While McInnes’ corporate reputation appeared to be in tatters, today’s news shows he has been working on a very quick comeback.
As boss of Premier’s retail business, McInnes will have control of a sprawling empire within the Just Group. McInnes will oversee clothing chains including Just Jeans, Jay Jay’s, Portmans, Jacqui-E, Dotti and Peter Alexander, as well as fledgling stationery group Smiggle.
Premier boss Solomon Lew has handed McInnes a “mandate to pursue growth” and described him as “one of Australia’s most successful retailers”.
“We are pleased to bring Mark into the Premier Team and I am very much working with him both to improve the performance of Just Group, Australia’s largest speciality retailer and to grow Premier’s retail assets.”
“The Premier Board is confident that Mark is the right person to take Premier and Just Group to the next level of performance and growth, which will be great for our shareholders and staff.”
McInnes’ new role will not be without challenges. Just Group, which turns over just under $1 billion a year and has 978 stores spread across Australia, New Zealand and South Africa, this morning reported a 1.9% fall in revenue for the half year ending January 29 to $474.8 million, with net profit slipping 7.1% to $39.4 million.
Like all retailers, Premier is battling poor consumer confidence (made worse by the recent rush of natural disasters), rising raw materials prices (particularly cotton) and a shift towards online shopping – Solomon Lew was one of the loudest voices protesting earlier this year against the GST exemption for goods purchased overseas worth less than $1,000.
McInnes will also need to combat the entry to the Australian market of Spanish retailer Inditex, which owns the giant Zara chain and will have stores in Sydney and Melbourne in a matter of month.
An early growth opportunity for McInnes could emerge within days if Colorado Group falls into the hands of receivers as expected.
The debt-laden group, which owes lenders $440 million, is widely expected to be broken up and sold off. Premier would likely be in the running to pick up individual brands including JAG and Diana Ferrari.
According to Premier, McInnes will receive fixed annual remuneration of $2 million and be eligible for up to $2 million in bonuses.
His contract also states that Premier “may end the employment immediately in the event of serious misconduct or circumstances which warrant summary dismissal at law”.
James was the editor and publisher of SmartCompany and LeadingCompany for five years. He is now the Australian Financial Review‘s companies & markets editor, and a former BRW editor.
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