The boss of Primark has admitted an “error of judgment” and resigned following an allegation made by a woman about his behaviour towards her in a social situation, the retailer’s owner has said.
Associated British Foods (ABF) said Paul Marchant accepted that his actions fell below the standards it expected and had resigned with immediate effect, exiting on Sunday.
He had cooperated with an investigation – which was initiated by ABF and carried out by external lawyers at Herbert Smith Freehills – “into an allegation made by an individual about his behaviour towards her in a social environment”, the group said.
The company said Marchant had made an apology to the individual and the ABF board as well as “his Primark colleagues and others connected to the business”.
It also emerged on Monday that it was not the first time ABF had investigated Marchant’s conduct.
A spokesperson for the company said: “One previous incident involving inappropriate communication was investigated some time ago. Proportionate action was taken at the time.”
George Weston, the chief executive of ABF, said: “I am immensely disappointed. At ABF, we believe that high standards of integrity are essential. Acting responsibly is the only way to build and manage a business over the long term.
“Colleagues and others must be treated with respect and dignity. Our culture has to be, and is, bigger than any one individual.”
The group said it would continue to offer support to the individual who had brought this behaviour to its attention.
Eoin Tonge, ABF’s finance director, will act as Primark’s chief executive on an interim basis, with its group financial controller, Joana Edwards, becoming interim finance director.
Marchant joined Primark as chief operating officer in 2009 and became chief executive later that year, taking over from Primark’s founder, Arthur Ryan. He previously worked for Debenhams, Topman, River Island and New Look.
“As we have committed to publicly, ABF seeks to provide a safe, respectful, and inclusive work environment where all employees and third parties are treated with dignity and respect. Primark is committed to doing business the right way at all levels of the company,” the company said.
Shares in ABF fell 2% on Monday. ABF, which also owns the grocery brands including Ryvita and Twinings, is controlled by the wealthy Canadian Weston family.
Under Marchant’s stewardship, Primark expanded rapidly in the UK and overseas, putting pressure on established clothing retailers such as Marks & Spencer. It paid out $12m (£9.3m) in compensation after it emerged one of its suppliers was housed in the Rana Plaza factory in Bangladesh, which collapsed in 2013, killing more than 1,000 people. Primark went on to improve conditions in its supply chain.
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The brand struggled during the pandemic when lockdowns forced shops to close, because unlike many rivals it did not offer online shopping. Since then it has enabled customers to browse items on its website and order them for collection in some stores.
Sales bounced back once high streets reopened, but in January this year Primark said quarterly sales had fallen for the first time since the lockdowns. Compared with retailers such as M&S and Next, Primark is more reliant on less well-off households, who have been feeling the pinch and shopping less. A mild autumn had also meant those households were less likely to buy clothing as warm garments were not really necessary, Tonge said at the time.
Last year, Primark – which now has 450 shops and employs 80,000 people – celebrated a half century on the British high street, having made its debut on Babington Lane in Derby in 1974. Back then it was selling women’s tweed coats for £9.50 and crepe blouses for 99p. Now, the Dublin-based chain partners with celebrities such as the pop star Rita Ora and last year laid out plans to invest £100m in its UK stores, including new openings.
Clive Black, a retail analyst at Shore Capital, said: “It is, indeed, a very disappointing, to say the least, end for Mr Marchant and all at Primark and ABF, where he has overseen the development of a fine value-based retailer with strong prospects for growth.
“That said, we concur with the views of Mr Weston around the bigger factor of dignity and respect being more important than any one person, no matter how senior.”
Susannah Streeter, the head of money and markets at Hargreaves Lansdown, said: “This leadership upset comes amid weaker consumer sentiment which has meant footfall at its stores has fallen – and the chain has been losing market share in the UK.”
Marchant was approached for comment.
