Primark CEO Paul Marchant resigned after an internal investigation on behavior considered inappropriate compared to a woman, as reported on Monday (31) Associated British Foods PLC (AB Foods), controller of the fashion network.
The company stated that Marchant acknowledged that its actions – occurred in a social environment – fell short of the standards expected by the company and that he apologized to the woman involved. Marchant did not respond immediately to requests for comment.
AB Foods’ shares dropped to 5% on the London stock market before softening losses.
“Colleagues and other people must be treated with respect and dignity. Our culture needs to be – and is – greater than any individual,” said George Weston, CEO of AB Foods, in a statement. “Acting responsibly is the only way to build and manage a business in the long run.”
The exit represents a significant change for Primark, which had only two CEOs in over 50 years. Known for its large stores in privileged locations, selling from £ 5 (R $ 32) to £ 28 (R $ 180) t-shirts, the retailer has become a relevant international business since March took over in 2009, succeeding founder Arthur Ryan.
During its management, the number of Primark’s stores doubled. The goal is to reach 530 units by 2026 – currently there are about 460. Marchant has supervised the “development of a value retailer with good growth prospects,” according to Shore Capital analyst Clive Black.
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The investigation was conducted by external lawyers at the company’s request, but the statement did not provide further details. AB Foods stated that Marchant “recognized its error of judgment” and continues to support the woman involved, whose identity was not revealed.
In response to questions, an AB Foods spokesman cited another previous episode involving Marçant, related to an inadequate communication, which was investigated and resulted in “proportional actions.”
Primark is responsible for almost half of AB Foods’s revenue and most of its profit. The conglomerate – which also operates in the sugar, agriculture and ingredients sectors – reduced its forecast for growth of retailer sales in January, citing the weak consumer feeling in the UK and a more negative scenario for the sector.
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Eoin Tongi, CEO of AB Foods, will interim the position of CEO of Primark, working in conjunction with a strategic council created in 2022 to provide external support to the retailer’s leadership.
According to Barclays analysts – a bank that acts as Broker da AB Foods -, the position left by Marçant is considered one of the most coveted of retail, which should attract great interest to the succession.
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