I've met former David Jones boss, Mark McInnes a handful of times at media events and public outings and have always found him to be a down to earth and friendly guy.
Professionally, he was the man who led a very public and successful turnaround of a high-end retailer with a languishing balance sheet, to a profitable company even through the global financial crisis.
So it came as something of a surprise to hear of his resignation on Friday, after by his own admission, behaving “in a manner unbecoming of a chief executive to a female staff member.”
I supported myself through high school and university by working at the home entertainment department of David Jones Wollongong through the late 1990s. Back then, the DJ's balance sheet didn't look so good.
Mark McInnes stepped in, in 2003, when shares in the retailer were trading at around $1 each. Then he embarked on a multi-year turnaround strategy focusing on store refurbishments and appropriate cost cutting.
Francesco De Stradis, an Investment Adviser from Ord Minnett told me in a recent SBS World News Australia story, that one of McInnes' most successful strategies, was opening stores only in the right areas. Many other larger retailers would open stores in major shopping centres just for the sake of presence.
Seven years, and a number of profit upgrades later, David Jones saw its share price surge some 300 per cent to the $4.49 level it is today.
While experts say the incident may tarnish the David Jones brand it was interesting to see the sharemarket only selldown the stock slightly, with shares recovering most of their four per cent early loss to be down only two cents at the close.
Analysts at Citi say any impact to the brand will be short lived and any potential hit is expected to be made up for by a savings in salaries.
In 2009, Mr McInnes was paid a salary package of almost $7million including $1.8million in cash. In comparison, new CEO Paul Zahra will be paid a cash base of $1.3million plus bonuses. Still McInnes walks away with around $2million in entitlements, but that's down from the speculated $10million in severance pay he may have got, if he stuck around…and followed the rules.
But the damage to the DJ's brand, will most likely be not as severe to the damage to Mark McInnes' reputation.
While sexual harassment, in the workplace, in public or at home is inexcusable, I'm going to leave the details of what actually happened to the legal experts and wait until we actually know more about the incident. But in the meantime, let's also not forget about the contribution McInnes has made to a great Australian retail icon.
