Looking forward to a holiday: Paul Zahra. Photo: Louie Douvis
David Jones chief executive Paul Zahra says he is ”simply tired” after leading the upmarket department store chain through one of the toughest retail conditions in recent history, and is looking forward to travelling, rest and new challenges.
It is surprising and I didn’t expect it.
Allan Gray chief executive Simon Marais
The department store surprised late on Monday by announcing that the 47-year-old intended to resign as soon as a successor was found. It said Mr Zahra was leaving for ”personal reasons”.
”I think 3½ years in the department store is a long time and if you think about our restructuring post the global financial crisis, us not being ready for the digital world – it has taken its toll and I’m just simply tired,” Mr Zahra said.
Mr Zahra, who has been at David Jones in several executive roles over the past 15 years and was appointed chief executive in 2010 following the shock sacking of former boss Mark McInnes over sexual harassment allegations, said it was time for him to prepare his departure from the retailer.
The planned exit comes at a tough time for not only David Jones but also all large retailers. The industry is facing some of the most difficult conditions in decades as shoppers have been reining in spending while online players are eroding market share.
In August, David Jones announced its third consecutive drop in quarterly sales, driven largely by its poorly performing electronics category, which it has recently outsourced, via a concession model, to Dick Smith. At the same time, womenswear, beauty and accessories generated sales growth, while menswear and childrenswear were flat.
The retailer’s turnaround strategy is to focus on its best performing, high-margin categories – primarily apparel and beauty.
David Jones has been heavily criticised for being too slow to embrace online shopping and in March last year even Mr Zahra admitted the retailer had suffered as a result.
In 2003, then David Jones chief executive McInnes closed the store’s online business. It was relaunched in 2009, but the online offering was still meagre.
It only got serious in November last year when it relaunched its omni-channel retail strategy, including a new web and mobile store with a heavily expanded product offering.
Retail analysts say Mr Zahra has been playing catch-up in the online space since taking on the chief executive’s role three years ago and it may have been a factor in his decision to leave.
”David Jones are doing the right things on paper right now in terms of actually strategising for a future with the whole omni-channel thing … and the rationalisation and optimisation of their store network, but they’re in a catch-up game now,” Steve Ogden-Barnes, a retail industry fellow at Deakin University said.
”They’re not necessarily doing anything wrong now, they’re just doing it too late. You’ve also got to start to wonder from his point of view whether he’s thinking, ‘Is this a race we’re ever going to win?”’