Primark Boss Paul Marchant Resigns: Paul Marchant, the head of fast fashion retailer Primark, has resigned with immediate effect after acknowledging making a “error of judgement” in a social event involving a woman late last year.
Marchant acknowledged his actions fell short of expectations, according to a statement released Monday by parent business Associated British Foods (ABF.L). The CEO of the $14 billion ($18 billion) multinational expressed his disappointment.
Additionally, a corporate spokeswoman said that Marchant had previously been the subject of an investigation about “inappropriate communication” and that “proportionate action” had been taken at the time.
During his more than 15 years as Primark’s CEO, Marchant more than doubled the company’s shop presence to over 450 locations in 17 countries in Europe and the US, and he quadrupled operating earnings to over a billion pounds.
AB Foods, which also has significant grocery, sugar, agricultural, and ingredient companies, receives over half of its group revenue and profit from Primark, an Irish company with a significant presence on British high streets.
Monday saw a 1.3% decline in parent company shares, increasing losses for the year to 6.2%.
“I am immensely disappointed. At ABF, we believe that high standards of integrity are essential,” CEO George Weston said.
“Acting responsibly is the only way to build and manage a business over the long term. Colleagues and others must be treated with respect and dignity. Our culture has to be, and is, bigger than any one individual.”
Marchant assisted with an inquiry “into an allegation made by an individual about his behaviour towards her in a social environment,” which was started by AB Foods and carried out by outside solicitors.”
Marchant admitted to his “error of judgement” and agreed that his behaviour “fell below the standards expected by ABF,” according to the statement.
According to the AB Foods spokeswoman, the lawyers’ report was received “recently,” even though the woman’s complaint and the incident that was connected to it occurred “towards the end of last year.”
The representative refused to specify whether the woman in question worked for Primark or the specifics of Marchant’s transgression.
According to AB Foods, Marchant expressed regret to the woman in question, the board of the organisation, his coworkers at Primark, and other individuals associated with the company.
It stated that the organisation would keep assisting the woman who alerted it to his actions.
Joana Edwards, AB Foods’ financial controller, will serve as temporary finance director, while Eoin Tonge, the company’s finance director, will serve as Primark’s CEO in the interim while collaborating with the store’s senior management group and Strategic Advisory Board.
“It is, indeed, a very disappointing, to say the least, end for Mr Marchant and all at Primark and ABF, where he has overseen the development of a fine value-based retailer with strong prospects for growth,” Shore Capital analyst Clive Black said.
According to Barclays analysts, running Primark is one of the most prestigious positions in UK retail and is expected to get a lot of attention from applicants.
“But we don’t think Primark are in a rush to fill the void until they find the right person to take charge,” they said.
The first-half results of AB Foods, which lowered its annual sales forecast for Primark in January, are scheduled to be released on April 29.