Sally Macdonald restored profit growth at Oroton and hopes to do the same at Woolworths’ BIG W. Photo: Rob Homer
Big W’s newly appointed boss, Sally Macdonald, is taking charge of Woolworth’s troubled discount department store chain at a time of unprecedented competition in the general merchandise sector.
The former Oroton Group chief executive was named the new chief executive of Big W on Friday and will be in charge of 22,000 staff and 190 stores from January.
Market watchers suggest the appointment is a big step up for Ms Macdonald, who drove a turn around in Oroton’s fortunes from a $9.4 million loss in 2006 to a net profit of $24.9 million in 2012.
However, her departure in 2013 was somewhat overshadowed by the loss of a lucrative distribution agreement with Polo Ralph Lauren, which triggered a fall in earnings.
Ms Macdonald’s appointment to Big W comes just weeks after Woolworths chairman Gordon Cairns appeared to all but rule out a sale of the business before an improvement in its performance.
At the Woolworths annual general meeting Mr Cairns said the Big W business needed to be turned around to “improve our optionality”.
This seemed to rule a line under persistent talk of private equity interest in the business and point to a plan for the chain’s future.
Retail analysts suggest the operation is hampered by a lack of clear brand identity, particularly when it’s up against Wesfarmers’ value powerhouse, Kmart, and Target with its strong apparel offering.
Big W’s first quarter like-for-like sales slumped 8.1 per cent, compared to 8.6 per cent comparable sales growth at rival Kmart and a 3.2 per cent improvement in sales at Target in the same quarter.
The discount department store market is also competing with the high-profile international operators such as H&M as well as the creep of grocery retailers into general merchandise and the big international discounters, Aldi and Costco.
Ms Macdonald said she believed the Big W brand was a great Australian brand that had tremendous scale, represented fantastic value for customers and held “much potential for growth.”
Woolworth’s departing chief executive, Grant O’Brien, said Ms Macdonald had a proven track record of successfully transforming companies through brand and category.
“Her knowledge of retail and consumer branded markets, as well as her online experience make her the idea leader for Big W.”