David Jones CEO Zahra Quits for Personal Reasons Amid Weak SalesDavid Fickling
David Jones Ltd. Chief Executive Officer Paul Zahra will quit Australia’s second-largest listed department store company after three years in the role.
Zahra, a former general manager of stores and operations who’s worked at the chain since April 1998, was leaving for personal reasons and will continue in the job “with unqualified support of the board” until a successor starts, the Sydney-based company said in a regulatory statement.
Zahra had focused on improving profitability at the 175-year-old chain amid weak sales driven by competition from online retailers and fragile consumer confidence. Sales from stores open at least 12 months only increased in three quarters since he started the job in June 2010, and the company’s annual revenue fell 10 percent during that period.
David Jones needs “someone that really knows how to run a store” as a replacement, Simon Marais, non-executive chairman of the company’s third-largest shareholder Allan Gray Australia, said by phone, adding that he was “neutral” on Zahra’s performance in the job. “There must be a lot of people overseas that know how to run these businesses.”
Shares rose 0.7 percent to close at A$2.85 before the after-market announcement in Sydney today. The stock has dropped 37 percent since Zahra took over on June 18, 2010, compared to a 21 percent fall in larger rival Myer Holdings Ltd. and an 18 percent gain in the S&P/ASX 200 index.
Quarterly sales fell to an eight-year low in the three months ended April 27 this year as the company stepped back from discounting that Zahra considered unsustainable.