Pie fights take toll on Morphet

SUE Morphet was one of Australia's more controversial chief executives.

The outgoing chief of Pacific Brands will be remembered, perhaps unfairly, as the boss who pocketed a hefty pay rise, sacked 1800 textile workers and moved manufacturing of much-loved Australian brands to China.

In announcing her resignation yesterday, she compared her five years as chief executive of Pacific Brands to playing against Collingwood "week after week".

Those unfamiliar with AFL should infer that her job was bruising, bordering on awful — made worse by a notoriously one-eyed (even one-toothed) supporter base.

Jests aside, the reality was probably much worse.

How many chief executives have hired 24-hour security to patrol their own house? Ms Morphet did in March 2009 when unionists, politicians and many Australians piled on her for more than doubling her salary, from $685,775 to more than $1.8 million, even as she sacked several thousand workers and reported company losses totalling hundreds of millions of dollars.

When she was promoted from general manager of underwear to CEO in August 2007, her brief was to "transform" the company.

Ms Morphet inherited a business that was loaded with debt, wedded to ageing, middle-of-the-road brands and under siege from the internet.

Supermarkets and retailers were making their own home-brand products sourced from Chinese factories, leaving less room for Pacific Brands' offerings such as Bonds, Berlei, KingGee and Rio.

In February this year, the company announced the loss of major customer Kmart, which stripped $33 million from Pacific Brands' sales. Ms Morphet battled a global financial crisis, soaring cotton prices and consumers shopping online. It didn't help when, last year, former Berlei bra boss Sally Berkeley filed a $9 million unlawful dismissal lawsuit.

Ms Morphet's big strategic play — employing cheaper Chinese workers — might have worked a decade ago but the company admitted yesterday that Chinese wages are rising by between 15 and 20 per cent a year.

In a previous statement to the media, when reporting interim 2012 results, Ms Morphet said she was optimistic she could turn the company around.

But besides shedding jobs and writing down assets such as underwear to zero, Ms Morphet has given analysts scant reason to believe she or her successor, ex-Foster's chief John Pollaers, can resuscitate Pacific Brands. Yet she defends her record.

"We have achieved the objectives we set ourselves," Ms Morphet said yesterday. She said that during her five years as chief executive, she had reduced the number of brands from 300 to 40, closed "uncompetitive local manufacturing" and cut distribution centres from 37 to 13. Besides cost-culling, Pacific Brands' management said little about how they expect to expand the company.

Ms Morphet cited "increasing use of social media", "leveraging consumer insights" and "focusing and investing" on big brands Bonds and Sheridan as her main strategies.

She also said her successors would "cautiously" pursue international opportunities.

Mr Pollaers, who takes over on September 3, told analysts and shareholders he had "faced up to few of those Collingwood battles".

He was last head of Foster's before it was swallowed by SABMiller and investors will wonder if he can emerge a winner this around.

Smartphone
Tablet - Narrow
Tablet - Wide
Desktop