The retail malaise in some parts of the sector has claimed another CEO victim with OrotonGroup (ORL) replacing its CEO of the past four years with its major shareholder as its interim chief executive after in the wake of the company’s disappointing half-year result.
Mark Newman, who has held the top job for four years, will be replaced temporarily by director Ross Lane, who is the company’s biggest shareholder with a 21% stake.
Chairman John Schmoll said Mr Lane’s "intimate knowledge" of OrotonGroup and his "broad retail experience" meant he was "ideally qualified to lead the company during this important period of transition." Mr Schmoll is a former chief financial officer of Coles Group.
OrotonGroup shares fell to a day’s low of $1.56, before bouncing a little to end up slightly at $1.62, to $1.59.
Oroton recently blamed its disappointing first-half result – when net profit dived 52% to $1.8 million for the six months ending January 28 – on its unprofitable GAP brand, unseasonable weather, “a structural change in shopping habits,” the exit of discontinued categories, lower factory outlet sales at Oroton, lower foot traffic and foreign exchange problems.
It is seeking to target a younger and broader customer, through using “influencers” to promote its products, putting more money into social media, and promotions such as its "Great Barrier Reef Collection."
OrotonGroup recently dumped Bridesmaid actress Rose Byrne as its model, and paid $4.5 million for a 30% stake in accessories brand The Daily Edited. It used the cost of that purchase to explain the omission of its final dividend.
Remember The Reject Shop has omitted its final dividend after last Friday’s shock sales and profits warning for the current second half and full year.
Bargain hunters went looking for value yesterday and chased Reject Shop shares up 7% to $4.45, trimming the loss since last Friday’s downgrade to 46%.
