What: It's good news for investors in Pacific Brands Limited (ASX: PBG) today with the announcement that CEO Mr John Pollaers will be leaving the apparel manufacturer after a "divergence between his views and those of the board regarding the best path forward for the company and its businesses."
Since Pollaers' appointment in September 2012, the share price of Pacific Brands has fallen 11%, while the S&P/ASX 200 Index (Index: ^AXJO) (ASX: XJO) has gained 27% resulting in significant underperformance for shareholders.
So what: Today's announcement included details that the strategy to take the business forward being suggested by corporate advisors from Macquarie Group Ltd (ASX: MQG) differs from the view of the now ex-CEO. Given the ongoing near-term weak outlook for sales revenue, shareholders will be no doubt be very keen to hear details of the strategic review and the Board's plans for moving the company forward from its current predicament.
Now what: Pacific Brands' board has undergone a significant refresh over the past two years so cannot be held responsible for Mr Pollaers' appointment or indeed the weak executive management team he assembled.
The past year has also seen funds managed by both Allan Gray and Lazard Asset Management move to control around 30% of Pacific Brands' stock; and indeed minority shareholders would be hoping that these two fund managers apply significant pressure on the board to see that a new broom is swept through the business.
Buy, Hold or Sell
While a turnaround of the group's fortunes won't occur overnight, there would appear to be potential for substantial shareholder value to be created if the right strategy is implemented.
