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International DIY News

Big W MD resigns following staff complaint

Big W store

Woolworths' BIG W managing director Alastair McGeorge has stepped down after barely a year in the job.

After a successful 20-year retail career in the UK, former New Look chief executive Alistair McGeorge was looking forward to the task of turning around Woolworths' struggling discount department store chain, BIG W.

Earlier this year the 55-year-old Brit issued a challenge to Kmart boss Guy Russo and Target managing director Stuart Machin: "We're going to be the No. 1 choice for Australian families in general merchandise," he said.

Barely a year after taking the helm, Mr McGeorge has returned to the UK with a cloud over his head following a staff complaint about his behaviour.

Mr McGeorge is understood to have stepped down on Thursday while on annual leave in the UK.

Complaint from employee
Woolworths said he resigned for health reasons, but in the interests of transparency added that there was a complaint from an unnamed employee about Mr McGeorge's behaviour in the workplace. He will not receive a payout or compensation.

Woolworths declined to confirm the nature of the complaint, saying only that his behaviour was verbal rather than physical.

"This complaint has been investigated and finalised and for legal reasons we are unable to make any further comment on this matter," the company said.

Mr McGeorge was a friend of Woolworths' non-executive director Christine Cross, a former Tesco executive who has been touted as a possible successor for Woolworths chairman Ralph Waters.

A former chief executive of British retailers New Look, Matalan and Littlewoods, Mr McGeorge had been consulting to BIG W for several months before he was appointed managing director in June last year, replacing long-serving Woolworths executive Julie Coates, who had been running BIG W for five years.

His unexpected departure leaves BIG W rudderless at a time when arch rival Kmart has delivered record sales and profit growth, and Target achieved its first profit growth in four years.

Earnings drop
BIG W's earnings have fallen from $200 million in 2010 to an estimated $130 million in 2015, but Mr George had forecast a return to profit growth in 2016 after introducing new brands such as Kardashian Kids and new categories such as partyware.

He is the latest of almost a dozen senior Woolworths executives who have resigned or been sacked in recent months amid escalating competition in food and liquor and department stores.

Woolworths chief executive Grant O'Brien resigned in June, a month after unveiling a three-year growth strategy that involved cutting 1200 jobs and reinvesting $500 million of cost savings into reducing grocery prices and improving service in supermarkets.

Supermarkets director Tjeerd Jegen stepped down in January after a sudden deterioration in supermarket sales and is now running a European discounter. Supermarkets finance director Martyn Roberts quit to join Coca-Cola Amatil, chief marketing officer Tony Phillips left after an unsuccessful Cheap Cheap marketing campaign, and the head of operations for fuel and convenience, Mark Hewlett, joined Metcash.

Search for new boss
Woolworths, which has appointed Egon Zehnder to conduct a global search for Mr O'Brien's replacement, has now started searching for a new BIG W boss.

Head of retail services Penny Winn, who is due to retire in November, will act as BIG W managing director until a permanent appointment is made.

Mr McGeorge's departure increases pressure on Mr Waters and Woolworths non-executive directors, who have been accused by investors of botching succession planning at Australia's largest retailer, and overlooking deteriorating performance in supermarkets.

Source : Sydney Morning Herald

21 August 2015

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