Year of change at the top?
Wesfarmers has this week revealed that Ian McLeod will move into a new role within the company’s head office structure, with his current 2IC, John Durkin, to take over the reins of the Coles food and liquor business.
The decision leaves Stuart Machin, who can claim credit for much of the Coles food and liquor turnaround, marooned at Target, while Durkin takes the plum job.
He is expected to assume responsibility for all of Wesfarmers’ retail brands.
McLeod has certainly revived Coles supermarkets business, albeit a turnaround for the liquor business has been much slower, with the Scottish retail executive lamenting that Coles Myer let Woolworths acquire Dan Murphy’s back in 1998.
Dan Murphy’s was offered to Coles Myer before an approach to Woolworths, but there is no certainty that the brand would have been developed by Coles Myer in the same way it has been under its current ownership.
Durkin, currently Coles COO, will replace McLeod as MD of Coles food and liquor in July.
Like McLeod and Machin, Durkin joined Coles as part of a business renovation team from the UK.
Durkin, who has worked with Safeway and Carphone Warehouse in the UK, joined Coles in July 2008 as merchandising director and was appointed COO in June 2013 when Machin took on the challenge of reviving Target’s fortunes.
Machin may well be considering his options now after missing out on the Coles role, given his contribution to the supermarket division’s
turnaround as COO before moving across to Target.
While Wesfarmers moves to strengthen its retail management structure, both Myer and David Jones’ CEOs are now understood to be reconsidering their prospective, well publicised exits.
Bernie Brookes, Myer CEO, was to complete his contract in August and exit the department store group after an eight year stint, but he is now apparently prepared to continue in the role if Myer successfully re- pitches its merger proposal to David Jones.
Paul Zahra, David Jones CEO, appears to have found a new lease of life, with the departure of chairman, Paul Mason, and two other directors who had been less than enthusiastic about Zahra’s strategy to build sales and earnings for the department store group.
There might not be room at the top for both Brookes and Zahra in a merged Myer- David Jones retail group, but Brookes could potentially oversee the initial integration of the two department stores, with Zahra marked to take over the reins for the long haul.
Retaining both CEOs would certainly provide more confidence to investors about the potential success of a merged Myer and David Jones, notwithstanding that research indicates David Jones’ customers base could be sharply eroded if the merger fails to get the market positioning of the two brands right.
The same research also found that around 26 per cent of David Jones shoppers do not shop at Myer.