The boss of Primark has admitted an “error of judgment” and resigned following an allegation made by a woman about his behaviour towards her in a social situation, the retailer’s owner has said.
Associated British Foods (ABF) said that Paul Marchant accepted that his actions fell below the standards it expected and had resigned with immediate effect.
He cooperated with an investigation – which was initiated by ABF and carried out by external lawyers at Herbert Smith Freehills – “into an allegation made by an individual about his behaviour towards her in a social environment”, the group said.
The company said Marchant had made an apology to the individual and the ABF board as well as “his Primark colleagues and others connected to the business”.
George Weston, the chief executive of ABF, said: “I am immensely disappointed. At ABF, we believe that high standards of integrity are essential. Acting responsibly is the only way to build and manage a business over the long term.
“Colleagues and others must be treated with respect and dignity. Our culture has to be, and is, bigger than any one individual.”
The group said it would continue to offer support to the individual who brought this behaviour to its attention.
Eoin Tonge, ABF’s finance director, will act as Primark’s chief executive on an interim basis, with its group financial controller, Joana Edwards, becoming interim finance director.
Marchant joined Primark as chief operating officer in 2009 and became chief executive later that year, taking over from Primark’s founder, Arthur Ryan. He previously worked for Debenhams, Topman, River Island and New Look.
“As we have committed to publicly, ABF seeks to provide a safe, respectful, and inclusive work environment where all employees and third parties are treated with dignity and respect. Primark is committed to doing business the right way at all levels of the company,” the company said.
Shares in ABF were the biggest faller on the FTSE 100 index in early trading on Monday, off 4%, before recovering slightly to settle down by 2.5%. ABF, which also owns grocery brands including Ryvita and Twinings, is controlled by the wealthy Canadian Weston family.
Under Marchant’s stewardship, Primark expanded rapidly in the UK and overseas, putting pressure on established clothing retailers such as Marks & Spencer. It struggled during the pandemic when lockdowns forced shops to close, because unlike many rivals it does not offer online shopping. Customers can browse its collections on its website and click and collect is available in some stores.
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Sales subsequently bounced back, but in January Primark said quarterly sales had fallen for the first time since the pandemic lockdowns. Compared with retailers including M&S and Next, it is more reliant on less well-off households who have been feeling the pinch and shopping less. Lower-income households were also less likely to buy clothing during the mild autumn when warm gear was not really necessary.
Last year, Primark – which now has 450 shops – celebrated a half century on the British high street, having made its debut on Babington Lane in Derby 50 years ago. Back then it was selling women’s tweed coats for £9.50 and crepe blouses for 99p. Now, the Dublin-based chain partners with celebrities such as the pop star Rita Ora and last year laid out plans to invest £100m in its UK stores, including new openings.
Clive Black, a retail analyst at Shore Capital, said: “It is, indeed, a very disappointing, to say the least, end for Mr Marchant and all at Primark and ABF, where he has overseen the development of a fine value-based retailer with strong prospects for growth.
“That said, we concur with the views of Mr Weston around the bigger factor of dignity and respect being more important than any one person, no matter how senior.”
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “This leadership upset comes amid weaker consumer sentiment which has meant footfall at its stores has fallen – and the chain has been losing market share in the UK.”
