PAUL MARCHANT, the head of fashion retailer Primark, has resigned with immediate effect after admitting to an "error of judgment" in his behaviour towards a woman in a social setting.
Associated British Foods (AB Foods), Primark's parent company, announced his resignation on Monday.
The company said Marchant had acknowledged that his actions did not meet the expected standards. AB Foods CEO George Weston said he was "immensely disappointed."
During his 15-year tenure, Marchant expanded Primark’s store network to more than 450 locations across 17 countries in Europe and the United States.
He also increased operating profit from about 250 million pounds to over a billion pounds.
Primark, which has a strong presence on British high streets, contributes nearly half of AB Foods' overall profit. The company also operates in the grocery, sugar, agriculture, and ingredients sectors.
AB Foods' shares were down 4 per cent on Monday morning.
"I am immensely disappointed. At ABF, we believe that high standards of integrity are essential," 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."
AB Foods stated that Marchant's resignation followed an investigation led by external lawyers into an allegation made against him.
The company said he cooperated with the investigation, acknowledged his mistake, and accepted that his actions fell short of company standards.
Marchant apologised to the individual involved, the company’s board, and his colleagues at Primark and AB Foods. The company said it would continue to support the individual who raised the concern.
Eoin Tonge, AB Foods' finance director, will serve as interim CEO of Primark, working alongside the senior management team and Primark’s Strategic Advisory Board.
Joana Edwards, AB Foods' financial controller, will take over as interim finance director.
Shore Capital analyst Clive Black said Marchant’s departure was "very disappointing" for Primark and AB Foods, where he had overseen significant growth.
Analysts at Barclays noted that leading Primark was one of the most prominent roles in UK retail and would likely attract strong interest from potential candidates.
"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.
AB Foods, which lowered its annual sales forecast for Primark in January, is set to release its first-half results on April 29.
(With inputs from Reuters)
