Primark chief executive officer Paul Marchant has resigned following an investigation into his behaviour toward a female employee, according to the fashion chain’s owner Associated British Foods Plc.
AB Foods said Monday that Marchant accepts that his actions — in what it called a social environment — fell below the standards expected by the company, and that he has apologised to the woman concerned. Marchant did not immediately respond to a request for comment.
Shares of AB Foods fell as much as 4.6 percent in early London trading. They were down 22 percent over the past year through Friday’s close.
Marchant had served as the retailer’s CEO for 16 years and is respected in the industry. Primark expanded aggressively on his watch, with a goal to reach 530 stores by 2026 — up from about 460 currently.
He had “overseen the development of a fine value-based retailer with strong prospects for growth,” Shore Capital analyst Clive Black said in a note.
AB Foods said it will continue to offer support to the woman. The investigation was conducted by external lawyers at the request of the company. It added that Marchant “acknowledged his error of judgment,” without giving details.
“Acting responsibly is the only way to build and manage a business over the long term,” AB Foods chief executive officer George Weston said in a statement. “Colleagues and others must be treated with respect and dignity. Our culture has to be, and is, bigger than any one individual.”
Primark accounts for almost half of revenue at AB Foods and most of its profit. The British conglomerate — which also has sugar, agriculture and ingredient arms — cut guidance for sales growth at Primark in January, blaming weak consumer sentiment and the wider gloom hanging over the UK retail sector.
Eoin Tonge, finance director at AB Foods, will act as Primark’s CEO on an interim basis, the company said.
By Katie Linsell
Learn more:
Primark-Owner ABF Cuts Guidance on Tough UK Retail Market
Associated British Foods Plc lowered its sales growth forecast for Primark, citing weak UK consumer sentiment and a 6.4 percent drop in like-for-like sales during the critical holiday period.
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