London (AFP) – Primark chief executive Paul Marchant has resigned following a company investigation into his behaviour toward a woman “in a social environment,” the budget fashion chain’s owner Associated British Foods (ABF) announced Monday. His resignation with immediate effect comes after 16 years as Primark’s CEO, overseeing expansion across Europe and into the United States.
“Marchant cooperated with the investigation, acknowledged his error of judgement, and accepts that his actions fell below the standards expected by ABF,” the company said in a statement. “He has made an apology to the individual concerned,” the group added. Agri-food giant ABF said it continues to offer support to the person who brought his behaviour to its attention. The group did not immediately provide further details when contacted by AFP.
“I am immensely disappointed,” George Weston, chief executive of ABF, said in the statement. He added that “our culture has to be, and is, bigger than any one individual.” Ireland-headquartered Primark accounts for almost half of ABF’s sales, operates in 17 countries, and has more than 80,000 employees.
– Leadership shakeup –
Marchant was the company’s second chief executive, succeeding founder Arthur Ryan, who headed the company since its launch in Ireland in 1969, under the name Penneys. ABF’s chief financial officer, Eoin Tonge, will replace Marchant on an interim basis.
“The change at the top will be unsettling particularly given that Primark delivered a very mixed bag of results at the last count,” said Susannah Streeter, head of money and markets at Hargreaves Lansdown. “This leadership upset comes amid weaker consumer sentiment,” she added. Its 450 stores sell mainly clothes and accessories while also hosting cafes, eyebrow bars, and hairdressers. Shares in ABF fell two percent in afternoon deals on London’s top-tier FTSE 100 index.
Primark’s UK sales dropped more than six percent during the key festive season in late 2024. “Although Primark’s international performance was much better thanks to the group pressing ahead with its store rollout programme, there could be uncertainty ahead about the speed of expansion given the change of boss,” Streeter said. Marchant told AFP in November that he intended for Primark to expand further in the United States and Europe.
It has signed with a franchise partner to open stores in the United Arab Emirates, Kuwait, and potentially Bahrain and Qatar. The low-cost fashion retailer has faced criticism, including from environmental campaigners who argue that the brand’s “throwaway” fashion is a drain on resources. Human rights groups accuse it of relying on suppliers in countries where workers are afforded little protection.
© 2024 AFP
