Pacific Brands chair Peter Bush either made the wrong decision two years ago or has changed his mind on what lies ahead in the companys future.
Either way as he moves to fast forward a liquidation of parts of the business it is clear, the way he thinks now, that John Pollaers was the wrong person for the job as chief executive.
Board chairmen make mistakes and with the benefit of hindsight Bush can count this as one of his doozies.
Pollaers was hired nearly two years with a growth agenda, but last month’s profit warning was the end of that, and after putting brand sale plans on hold for his new boss, Bush put them back on the agenda.
That was the intent of Macquarie’s appointment, and notably the bank reported directly to Bush with Pollaers on the sideline.
The writing then was on the wall when earnings before interest and tax forecasts were slashed from $122 million to $92 million last month.
Debt over the last 12 months has increased from $159 million to $255 million and sales have gone backwards in a market in which discretionary sales have halted.
Advertising and sales and administration expenses have increased for the same period and in this environment there is nothing to show for it.
Pacific Brands is not Robinson Crusoe on that score, but Bush has changed horses midstream and decided to go back to plan and fast-forward the asset sales planned before Pollaers walked in the door.
This was a company which teetered under bank control until finances were restored under James MacKenzie’s tenure as chair.
It was over hyped as a growth stock when it floated in 2004, and along the way has seen sales revenue halve without a corresponding cut in costs.
Maybe Bush is doing the right thing for shareholders now, but with the wonderful benefit of hindsight, as chair, he failed at the first instance in appointing the right chief executive.