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JOHANNESBURG- South African clothing and food retail giant Woolworths yesterday sacked its divisional head in Australia, John Dixon, in a major restructuring drive that it said was meant to simplify its operations Down Under.

Woolworths said it would not replace Dixon and would have the heads of David Jones and Country Road now reporting directly to chief executive Ian Moir in South Africa.

The company said Dixon’s role as the Australian regional chief executive would be discontinued.

“Given this, John has re- signed as an executive director of WHL with effect from May 21,” Woolworths said.

“We would like to thank John for his stewardship of the business over the last two-and-a-half years and wish him every success for the future.”

Dixon’s abrupt departure comes after Woolworths was forced to write off A$712.5 million (R6.7billion) from David Jones earlier this year.

Woolworths announced the write-down in January, saying that the downturn in the Australian retailer sector and poor or delayed execution of some company initiatives had reduced the value.

In the six months to end-December results, David Jones’s profit declined by 38.5percent, but the group said the retailer improved in the second quarter. Country Road recorded a 15.3percent increase in profits.

Woolworths said sales for the first 26 weeks of the 2018 financial year increased by 2.5percent to R38.8billion, reflecting continued challenging trading conditions in both South Africa and Australia. Adjusted profit before tax decreased by 8.8percent to R3bn, down from R3.27bn as compared to a year before.

Jordan Weir, an equities trader at BayHill Capital, said the simplification of the leadership structure was a strategic cost-cutting initiative rather than a revolutionary solution to immediately improve the struggling clothing businesses.

He said the new structure would place full accountability directly on to David Jones chief executive David Thomas and his Country Road counterpart, Scott Fyfe.

“They will now be fully responsible for answering any tough questions around performance going forward, while also having to deal personally with any negative consequences should they arise.

"There will no longer be a buffer between Ian Moir and its Australian subsidiaries,” Weir said.

Woolworths acquired David Jones in 2014 for A$2.1bn (R22bn) as the retail group spread its wings into the Australian market. The acquisition was seen as an opportunity to earn hard currency for the group in the face of South Africa’s weak economy, rand volatility and increasing political uncertainty.

Woolworths said the changes would improve David Jones’ performance in the future.

Woolworths shares closed flat at R59.90.

- BUSINESS REPORT