DJs veteran poised to give Pacific Brands extra lift

DAVID Jones chief executive Paul Zahra has lost style guru Colette Garnsey to Pacific Brands amid the continuing shake-up of the retailer's top brass.

By InvestSMART · 4 Nov 2010

By InvestSMART ·
4 Nov 2010

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DAVID Jones chief executive Paul Zahra has lost style guru Colette Garnsey to Pacific Brands amid the continuing shake-up of the retailer's top brass.

Pacific Brands hopes Ms Garnsey can revitalise its ailing flagship brand Bonds when she lands at the clothing company early next year.

Ms Garney's exit from David Jones follows last week's resignation of marketing head Damian Eales, who was close to disgraced former David Jones chief executive Mark McInnes, to take up a job at Westpac starting in April.

As general manager of apparel, cosmetics, accessories, footwear and children's wear, Ms Garnsey (pictured), a 20-year David Jones veteran, was responsible for predicting what would open the wallets of the retailer's female clientele and representing the company at events including last month's Caulfield Cup.

But despite her key role she was paid a relatively modest bonus this year: $211,000, or 23 per cent of her base wage.

By contrast, Mr Zahra collected a 66 per cent bonus as group general manager of operations, the role he held until handed the top job in June when Mr McInnes quit after a sexual harassment scandal.

In a statement, Pacific Brands chief executive Sue Morphet said she was thrilled to have Ms Garnsey on board.

Ms Garnsey will be responsible for Pacific Brands' underwear and hosiery division, which has been expanded to include the flagging Bonds brand.

Sales of Bonds fell 4 per cent in 2009-10, and Pacific Brands has decided to throw more resources at the brand.

Ms Garnsey's portfolio of brands will also include Berlei, Holeproof, Jockey, Razzamatazz, Rio and Voodoo.

Bonds head Kate Hahn and underwear chief Ross Taylor, who previously reported to Ms Morphet, will now report to Ms Garnsey.

The departure of Ms Garnsey and Mr Eales has caused a ripple effect at David Jones. The general manager of accessories, footwear and childrenswear, Sacha Laing, has been promoted to Ms Garney's position, while Mr Eales's job as head of both marketing and finance has been split in two.

Marketing will be handled by Brett Riddington, at present general manager of cosmetics, while finance goes to Matthew Durbin, a former merchandising head who has spent the past year looking after David Jones's alliance with American Express.

David Jones shares fell 2 per cent, or 10?, to close at $4.69 while Pacific Brands finished unchanged at $1.12.

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Frequently Asked Questions about this Article…

Who is Colette Garnsey and what role is she taking at Pacific Brands?

Colette Garnsey is a 20‑year David Jones veteran who will join Pacific Brands early next year as the head of its expanded underwear and hosiery division. Pacific Brands CEO Sue Morphet said Garnsey will oversee Bonds and other lingerie and hosiery brands, with Kate Hahn (Bonds head) and underwear chief Ross Taylor reporting to her.

Why did Pacific Brands recruit Colette Garnsey and what do they hope she can do for the Bonds brand?

Pacific Brands hired Garnsey hoping she can revitalise its flagging Bonds brand. The company has expanded its underwear and hosiery division and is throwing more resources at Bonds after sales fell 4% in 2009–10; Garnsey’s retail experience and role leading apparel and cosmetics at David Jones are the reasons cited for her recruitment.

How have the departures of Colette Garnsey and Damian Eales affected David Jones’ management structure?

Their exits triggered a reshuffle at David Jones: Sacha Laing was promoted to take Garnsey’s former responsibilities; Damian Eales’ former combined role in marketing and finance was split into two positions — Brett Riddington (currently GM of cosmetics) will handle marketing, and Matthew Durbin will take on finance.

What short‑term market reaction was reported after these executive moves?

The article reports that David Jones shares fell about 2% to close at $4.69 on the day, while Pacific Brands’ stock finished unchanged at $1.12.

What other executive moves related to David Jones were mentioned that investors should know about?

The article notes Damian Eales resigned from David Jones to take a job at Westpac starting in April. It also explains that Paul Zahra became David Jones CEO in June after former CEO Mark McInnes quit amid a sexual harassment scandal.

Were any executive compensation details disclosed that everyday investors might find relevant?

Yes. The article states Colette Garnsey received a bonus of $211,000 this year, equal to 23% of her base wage, while Paul Zahra collected a 66% bonus when he was group general manager of operations before being promoted to CEO.

Which specific brands will be included in Colette Garnsey’s portfolio at Pacific Brands?

Garnsey’s portfolio at Pacific Brands will include Bonds, Berlei, Holeproof, Jockey, Razzamatazz, Rio and Voodoo, in addition to the wider underwear and hosiery responsibilities.

What should everyday investors watch for after these leadership changes at David Jones and Pacific Brands?

Investors should monitor execution on brand turnarounds (especially Bonds, given the 4% sales decline in 2009–10), any further management changes, and subsequent quarterly sales and earnings updates. The immediate market reaction was a small fall in David Jones shares while Pacific Brands was unchanged, but longer‑term impact will depend on whether the new leaders can improve sales and margins.