All Pacific Brands needs is love to help turn around its flagging fortunes, its new chief executive says.
The struggling clothing and homewares maker, whose brands include Bonds, Rio and Sheridan, surprised investors today with news that chief executive Sue Morphet was leaving and being replaced by former Foster’s boss John Pollaers.
Pacific also revealed its annual losses had trebled to $450.7 million, largely as a result of restructuring charges and goodwill writedowns.
Mr Pollaers has his work cut out at Pacific, which has been struggling amid tough times in the retail sector and failed to a clinch various takeover deals between January and May.
Stepping down ... Sue Morphet.Credit: Jessica Shapiro
But Mr Pollaers, whose appointment comes two months after Pacific appointed a new chairman, is optimistic Pacific can do better given the strength of its brands.
‘‘I think this is a business that has potential to be a much-loved company in Australia and when you look at brands like Bonds, Berlei, Sheridan, and the workwear businesses, they’re terrific brands and I think it’s really a case of standing back and looking at their potential,’’ he said.
‘‘My perspective as somebody coming in is that they are loved brands and now we can really take this to being a much-loved company.’’
Ms Morphet hands over to Mr Pollaers on September 3.
John Pollaers, former chief executive officer of Foster's Group Ltd.Credit: Bloomberg
She said in a statement that after five years in the top job she believed it was time to go and that the necessary changes had been made to set Pacific up for future growth.
Mr Pollaers, whose fixed remuneration for his first year will be $1.4 million plus incentives, joins Pacific after leaving Foster’s following its takeover by SABMiller in 2011.
He has held senior roles at international drinks group Diageo, spent nine years in the Australian navy and serves on the board of the National Breast Cancer Foundation.
He said his 22 years experience in the global consumer products sector and with building big brands would be valuable at Pacific.
Chairman Peter Bush, who replaced James MacKenzie in June, said Mr Pollaers’ task would be to focus on top line growth and sustained earnings streams.
He said a search was launched for a replacement for Ms Morphet in late May/early June after she and the board discussed the fact she had held the top job for five years and dealt with a ‘‘tsunami of challenges’’.
IG Markets analyst Cameron Peacock said he was not reading too much into Ms Morphet’s departure.
‘‘It doesn’t seem as though she’s been forced out,’’ he said.
Pacific’s losses trebled in the year to June 30 from a $131.9 million deficit in 2010/11 because of $502.7 million in non-cash writedowns of goodwill on its underwear, homewares and workwear arms plus a $31.4 million restructuring charge.
It expects market conditions to remain challenging in fiscal 2013, with underlying sales so far marginally below the early weeks of 2011/12.
Pacific cut its fully-franked final dividend to 2.5 cents a share from 3.1 cents.
Its shares were 1.5 cents lower at 57.5 cents in afternoon trading.
The author holds shares in Pacific Brands.
AAP