David Jones chief executive Mark McInnes has stood down due to inappropriate behaviour, saying in a statement he acted inappropriately towards a female staff member.
Paul Zahra, former David Jones stores operations manager, is the new chief executive and will join the board of directors, the company announced in a statement today.
But the announcement has already seen the company’s shares drop 3.55% this morning with the company currently trading at $4.40.
McInnes said that at two recent company functions, he acted inappropriately towards the staff member in question in a manner “unbecoming of the high standard expected of a chief executive officer”.
“As a result of this conduct I have offered my resignation to the David Jones Board and we have agreed to the mutual termination of my employment with the company, effective immediately”.
“As a chief executive officer and as a person I have a responsibility to many, and today I formally acknowledge that I have committed serious errors of judgment and have inexcusably let down the female staff member.”
It has been reported by The Australian the staff member in question was a 25-year-old member of the marketing department, but chairman Robert Savage declined to confirm those details today at a press conference.
Savage also said he is unaware of McInnes’ whereabouts, but reports suggest he is leaving the country.
It is understood the employee took her complaint to workplace law firm Harmer’s Workplace Lawyers after the second incident.
McInnes will leave with just $1.5 million in termination pay, a lower figure than he could have received due to his actions, the company said. He will also leave with a statutory payment of $450,000.
In the statement, McInnes said he apologises to “everyone I have let down” and said he and his partner will be overseas “for the foreseeable future”.
He also said he hopes to minimise the impact of his errors in judgement, and was proud to have served at David Jones for the past 13 years.
“I am very sorry to be leaving in these circumstances and wish all involved with David Jones continued success.”
In a statement this morning, Zahra reiterated the company’s sales guidance from May, for after-tax profit to grow 5-10% over the second half of the year, and the 2011 financial year. He also said the earnings from the first two weeks of clearance sales have been pleasing.
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
