Just where the rainmaker of retailing Mark McInnes would turn up has been the industry’s biggest guessing game since he left Solomon Lew’s Premier Investments two years ago.
Rags-to-billionaire retailer Brett Blundy has snared the former chief executive of David Jones and Premier in the hope that McInnes can sprinkle some of that retail fairy dust on his $3 billion empire, which owns or is a major investor in brands including Lovisa, Adairs, Accent Group and Best & Less.
The word in industry circles is that in the week since the Lew-imposed golden handcuffs were removed, McInnes had fielded five serious offers.
It isn’t clear whether the top job at Myer was one of them, or whether the department store was unable to offer McInnes the level of salary he had become accustomed to at Premier.
Lew is now the largest shareholder in Myer and will have plenty of sway – if not complete control – over who takes the Myer job. But McInnes didn’t have his prodigal son moment with Lew.
It is probably no accident that news about where McInnes had landed coincided with a 3.5 per cent fall in Myer’s share price.
During his seven-year stint at David Jones the retailer’s share price quadrupled, and in the ten years he worked for Premier, its stock tripled.
In other words he was instrumental in making Lew a lot richer. In his final year at Premier, McInnes pocketed $5.4 million in base salary and bonuses.
McInnes was credited during his time at Premier with a significant part of the expansion of its two popular brands, Peter Alexander and Smiggle, and became legendary in commercial property circles for playing hardball with landlords.
Despite his impressive business performance, McInnes left David Jones under a cloud amid sexual harassment claims. McInnes denied the allegations and a civil matter was settled outside of court.
The company has since changed ownership twice as it has struggled with revenue and profitability.
“During his seven-year stint at David Jones the retailer’s share price quadrupled and in the ten years he worked for Premier, its stock tripled.”
Taking on the Myer job would have been a neat solution for Myer, which has experienced some revival in recent years, but like other retailers is suffering from sagging discretionary spending.
McInnes’ replacement at Premier, Richard Murray, lasted less than two years in the role and has now moved to take up the role of running the Metcash-owned Total Tools – a significantly smaller business.
Despite Blundy’s holding company having stakes in a number of brands, McInnes says he won’t have a direct operational role in any, instead describing his position as more complementary.
Blundy has a history of growing brands, buying into others and some brand churning.
He acquired Best & Less last year in a bid with long-time business partner Ray Itaoui, two years on from his sale of his ‘frisky’ Honey Birdette lingerie chain to Playboy owner PLBY. The same year, Blundy sold his 16 per cent holding in youth-focused brand, Universal Store.
In 2018, he offloaded his Bras N Things lingerie retail chain to US giant Hanes Brands in a deal valuing the brand at $500 million.
McInnes describes Blundy as a man with big ambitions and a balance sheet to match, and his own role as being more strategic – advising where particular brands should go.
Re-entering the retail atmosphere after two years will require a readjustment for McInnes, who took his gardening leave in the post-COVID boom as consumers with fat wallets started to repopulate the malls.
That said, McInnes thinks retail has held up better than most exports were predicting.
He reckons people are now spending their household savings, which can’t go on forever. He also points to the fact that Taylor Swift tickets sold out immediately, suggesting there is money out there.
Strong employment is the factor that he thinks has saved retail from a very heavy landing, and notes that if the US finds itself in a recession then all bets are off.
Barring that, McInnes’ challenge is to make a second retail billionaire even richer.
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Source: Thanks smh.com