Ian Moir's almost decade-long tenure as CEO of Woolworths has once again been blemished by the acquisition of Australian retailer David Jones.
This week Moir faced yet another hurdle with the departure of the third David Jones CEO since 2014.
David Thomas, who was appointed as David Jones CEO in 2017, resigned this week. Woolworths cited personal reasons for his departure.
The market did not take the news well. Woolworths' share price fell 2.8%. Since the South African retailer bought David Jones four years ago, Woolworths' share price has tumbled more than 30%.
Thomas's departure comes after former CEO John Dixon was axed a month before David Jones's MD for clothing and general merchandise, David Collins, was sacked, amid restructuring and cost cutting measures that were aimed at stabilising the business, the group said at the time.
Iain Nairn resigned as CEO shortly after Woolworths bought David Jones.
The 2014 acquisition of David Jones, which cost the company R21.4bn, has drawn Woolworths into ceaseless difficulties, with some saying the deal was one of the retailer's worst decisions.
Four years after the purchase, Woolworths had to write off almost R7bn, leading to a loss of R3.5bn after tax in its 2018 financial year to end June from a R5.4bn profit in the prior year.
Even though the group previously admitted that it had overpaid for David Jones by almost 33%, it has also backed the deal, stating previously that it would make the same decision to buy David Jones if it had to consider the purchase again.
In the interim, while the company goes in search of Thomas's successor, Moir will take up the reins at David Jones, the company said.
But it's not just a new CEO that is the issue. David Jones has made many attempts to attract customers by updating its merchandise and reinventing its online offering. Yet the restructuring has not yet yielded the desired results and David Jones continues to weigh on the performance of Woolworths.
Moir also has to prioritise helping the South African business to regain its footing. The company's non-food divisions, which include apparel, beauty and home, have suffered setbacks.
Lester Davids, a trading desk analyst at Unum Capital, said Moir "having to [now] put out the fire in other areas of the business will definitely shift the focus of group management".
"Investors would not want management to be taking their eye off any particular area of the business, especially the areas where weaker growth is currently being experienced. If you have to look at the South African operations, it's not doing as well. In fact it's a bit soft because of the economy and perhaps some of the market share that may have been lost."
There were also changes in terms of consumption trends, with consumers moving online, Davids said.
Evan Walker, a portfolio manager at 36ONE Asset Management, said the continual changes at David Jones were "no way to stabilise a business that they've invested so much in. It's a poor reflection on Woolworths' management. Ian Moir needs to resolve this himself for the South African business and go to Australia and fix the [David Jones] business.
"He made the acquisition, he spent the money, he should go there and fix it and employ someone.
"The Woolworths business is suffering because of a lack of responsibility in SA and this disjointed management operation they've got now."
Coupled with the high cost of investing in department stores, the David Jones buy was "a very poorly thought-out acquisition. We've seen it go absolutely nowhere in the last four years . it really has left the South African business languishing," Walker said.
It's a daunting task for whoever the group appoints as CEO of David Jones.
Davids said: "Definitely, they've got a bit of a tough road ahead of them in trying to stem some of the pain. The individual has to be someone who has vast global retail-sector experience as well as a thorough knowledge of the Australian consumer and economy."..