Primark Chief Executive Officer Paul Marchant resigned following an investigation into an allegation about his behavior toward a female employee in a social environment.
Associated British Foods Plc, the owner of the fashion chain, said Monday that Marchant accepts that his actions fell below the standards expected by the company and that he has apologized to the woman concerned.
Shares of AB Foods fell as much as 4.6% in early London trading. They were down 22% 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. This month, Primark won ‘best retailer over £250 million' at the annual Retail Week Awards, a glitzy event hosted at Grosvenor House in London.
Primark expanded aggressively under Marchant, with a goal of reaching 530 stores by 2026, up from about 460 currently.
“Acting responsibly is the only way to build and manage a business over the long term,” AB Foods Chief Executive Officer George Weston said. “Colleagues and others must be treated with respect and dignity. Our culture has to be, and is, bigger than any one individual.”
AB Foods said it will continue to offer support to the woman. It said external lawyers conducted the investigation, which was initiated by the company.
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 in a statement.
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