SYDNEY – Australia’s business world has been rocked by the sudden resignation of one of its most respected executives, Mark McInnes, the chief executive officer of department store chain David Jones, following a sexual harassment complaint.
In a statement tendered to the Australian Stock Exchange earlier today, McInnes admitted that at two recent company events he had behaved in “a manner unbecoming of the high standard expected of a chief executive officer to a female staff member. I formally acknowledge that I have committed serious errors of judgment.”
Legal representatives of the complainant, an as-yet unidentified 25-year-old member of the marketing department, had contacted the David Jones board over two separate incidents, the first occurring in May and the second approximately 10 days ago.
At a press conference at the flagship Elizabeth Street store, chairman Robert Savage announced the appointment of Paul Zahra as the new ceo, effective immediately.
Previously David Jones group’s general manager of stores and operations, Zahra has been with the company for 12 years and from 1999-2003 was the general manager of cosmetics.
McInnes leaves the company with a $1.73 million golden handshake, approximately $4 million less than his contractual entitlements.
It’s a spectacular fall from grace for McInnes, who engineered the resurgence of the 38-unit department store chain over the past seven years through a strategy of cost cutting, store refurbishments, the reallocation of space to high-margin merchandise and exclusive brands and high-profile marketing exercises. Examples include a biannual fashion showcase that is currently fronted by the company’s new fashion face, Australian model Miranda Kerr.
On Friday, after falling as much as 5 percent during the day, David Jones’ shares closed down 0.4 percent to close at $3.89. The company’s market value stands at $1.9 billion.