Domino's Pizza CEO quits as Hungry Jacks boss takes over
The news triggered a 17 per cent share price drop on Wednesday morning, after falling 40 per cent over the last year as earnings sour and a long line of executive departures, including two CEOs in the space of seven months.
The shock departure of the CEO and concerns were heightened as to the future direction of the pizza chain and its much-needed revitalised strategy to revive its flagging sales and profitability.
Domino's dropped the bombshell on the market before it opened on Wednesday that Mark van Dyck – who only joined as CEO in November to replace long-serving boss Don Meij – had told the board he intended to leave the company, with his departure to take effect on December 23. He has also stepped down from Domino's as a director, effective immediately.
No explanation for his sudden reason to depart the pizza maker was given, other than a short statement from Mr van Dyck that he was privileged to lead Domino's through a 'transformative period'.
Domino's chairman, billionaire and its largest shareholder Jack Cowin told The Australian on Wednesday morning that the Domino's business was travelling fine and was meeting its consensus forecasts, but that this was simply a 'management change' as CEO Mr van Dyck was looking for something different 'at this stage of his life'.
'Well, he just decided that at this stage of his life in six months time he would like to move on,' Mr Cowin told The Australian.
The billionaire founder of Hungry Jack's, Domino's chairman and its largest shareholder, told The Australian Mr van Dyck had first joined Domino's as a consultant and then stepped into the CEO role when its former boss Don Meij left in November.
'He was brought in to do some specific things, which he has done, like set up the strategy, closed some stores that were losing money and he's done that and so the question is do you now move into a new stage of execution of some of the ideas that we want to work on.
'The business continues and there is no great drama here.'
Domino's didn't issued a trading update with the announcement of its CEO quitting, but Mr Cowin confirmed to The Australian the pizza company was meeting consensus forecasts.
The Australian contacted former CEO Mr Meij who is currently in Denver, US, for a business trip. He told The Australian he was unaware of the news of Mr van Dyck stepping down or what had happened at his former company. He declined to comment on the matter.
Mr Meij left the company late last year after 22 years as CEO but in the wake of a string of profit downgrades and a collapsing share price.
When Mr van Dyck was appointed as CEO in November he began knocking the company into shape which saw a string of executives depart, including the sister of Mr Meij, new executives hired and work begun on resetting the company which included the closure of 205 underperforming stores across Japan, Europe and Australia/New Zealand.
But now Domino's must start again with a new CEO, when they are found, and a new strategy to lift the pizza maker out of the earnings doldrums.
Taking the reins as interim CEO for the moment, will be Domino's chairman, largest shareholder, Mr Cowin, who will assume the role as executive chair as a global search begins for a CEO of Domino's whose pizza chains stretch from Australia and New Zealand to Japan, Germany and the Netherlands.
The shock departure with no explanation will cause heartburn among investors who held out hope in Mr van Dyck and his stated plans when he joined about how he would set the former market darling company back on its growth trajectory after a tumultuous time on the market.
'It has been a privilege to lead Domino's through a transformative period,' Mr van Dyck said. 'With a clear strategy and strong team in place, I believe the time will be right at the end of this calendar year to hand over to the next CEO. My focus in the months ahead will be on supporting a smooth transition.'
There has been a slew of management changes at Domino's recently including recent departures of its Australia/New Zealand boss, resignations and reshuffles at its European and Japanese arms and the announced resignation of its previous CFO in February. Now it will rack up three CEO's in a year.
Mr Cowin, who has spent more than five decades in the global quick-service restaurant sector, including being one of the founders of KFC in Australia, the founder of Hungry Jack's, and leading Domino's expansion into Europe and Asia, thanked the outgoing CEO.
'Mark has made a valuable contribution to Domino's during a period of significant operational reset. With the strategic foundations now firmly in place, this transition enables a new CEO to take Domino's to its next stage of growth. I look forward to supporting the executive team during this important phase.'
In February at its half-year results Domino's then new CEO Mr van Dyck said he believed Domino's still has huge opportunities in Japan, a $105bn fast-food market, but conceded the pizza chain grew too fast there and opened too many stores in the same prefecture, with heavy discounting diminishing the quality of pizza in the eyes of diners.
Only three months into the role at the time, Mr van Dyck slammed the brakes on Domino's breakneck expansion under its former CEO Mr Meij, who took the Australia-based fast food business to Asia and Europe by buying and opening thousands of stores. Eli Greenblat Senior Business Reporter
Eli Greenblat is a senior business reporter at The Australian and leads coverage for the paper on the retail and beverages industries as well as covering issues related to supermarket regulation and competition, consumer behaviour, shopping, online retail and food and grocery suppliers. He has previously written for The Age, Sydney Morning Herald and the Australian Financial Review. Retail
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