“Frankly Unacceptable”: Woolworths Chairman Acknowledges 2015 Results Disappointment
In his address, Cairns stated “the entire senior leadership group takes responsibility for the poor results”, with Ralph Waters as chairman and Grant O’Brien as CEO having stepped aside to make way for new leadership.
“The results for 2015 were frankly unacceptable, and the disappointing share price performance has reflected this,” Cairns stated.
Cairns stated that now is the time to move on.
“I am convinced that whilst the business has stalled, it can be returned to those great days. We have made some mistakes, acknowledged those mistakes, publicly learned from them, and now are going about fixing them,” he commented.
“But this will take time, and we as a board and management team, will not be rushed to quick fixes. The potential in this organisation is immense, but we need to be clear on our game plan.”Along with reinvigorating its supermarkets business, Masters and Big W are among Woolworths’ priorities.
Cairns described the opportunity in home improvements as “compelling”.
“It is a growing market, with a high degree of fragmentation,” he commented. “There is plenty of room for a strong number two. We have identified our competitive advantage. But execution has let us down. And it is clear that we cannot afford as a business to continue losing over $200 million a year.
“When I joined I said I had an open mind on Masters, and that the board would be informed by the numbers from the five-year plan and our options from that. This is what we as a board are working on.”
Big W is making half the profit it was five years ago, Cairns stated.
“The discount department store sector is rapidly changing and is highly competitive,” he commented. “But we have not helped ourselves with our value proposition, some execution issues in IT, and a lack of leadership.
“With good leadership in place, there is a clear path to improve returns and provide us with more options.”
Cairns stated interviewing is currently being conducted for a replacement CEO, adding that the board will not be rushed.