David Jones chief Iain Nairn quits

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This was published 8 years ago

David Jones chief Iain Nairn quits

By Catie Low
Updated

David Jones chief Iain Nairn has resigned from the department store chain after less than 14 months in the job and despite a 28.8 cent jump in operating profit in the 11 months to June 30.

South African owner Woolworths Holdings revealed on Wednesday it had appointed former Marks & Spencer executive John Dixon to the role as of January 2016.

David Jones chief executive Iain Nairn (left) and Woolworths chief executive Ian Moir.

David Jones chief executive Iain Nairn (left) and Woolworths chief executive Ian Moir.Credit: Louise Kennerley

Mr Dixon has been with Marks & Spencer for more than 25 years; he joined the board in 2009 as director of foods and led a turnaround of the £5 billion food business.

The unexpected leadership switch comes amid speculation David Jones is keen to launch its own gourmet food operation.

Woolworths said Mr Nairn was resigning for personal reasons but he will continue to advise the retailer for three months.

Woolworths chief executive Ian Moir said Mr Nairn had made a significant contribution to the Australian business, as chief of Country Road and more recently chief of David Jones.

During his time at the helm, Woolworths turned around a four-year earnings decline, to report a 6.4 per cent increase in sales to $1.9 billion in the six months to June 30, the strongest in eight years.

Mr Nairn replaced outgoing chief executive Paul Zahra in August last year, just weeks after Woolworths took control of David Jones in a $2.2 billion takeover.

"John's [Dixon] appointment reflects our long-term strategy to take the David Jones business to the next level," Mr Moir said.

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"John is a world-class retailer who brings with him a powerful combination of international food and fashion expertise supported by large-scale retail systems and management experience.

In August Mr Moir said he wanted to improve operating profit margins to more than 10 per cent, up from 7.6 per cent and significantly higher than the 3 per cent at the time of its acquisition of the business.

"It's turning into a world-class department store," Mr Moir said. "We've only had one year of it, yet the comparable store growth was 3.7 per cent … with second-half comps up 6.5 per cent," he said.

"It's a much more profitable business than it was."

Since taking over the business, Woolworths has deleted 180 brands and replaced niche brands with high-profile mid-market labels such as Seed, FCUK and Marcs as well as tripling floor space for its own fashion brands, Country Road and its sister brand Mimco, Witchery and Trenery.

Mr Moir said Sales in the first eight weeks of 2016 had "started very strongly" and he expected above market sales growth despite the weak consumer sentiment in Australia.

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