Designer threatens to ditch DJs

Ex-CEO Mark McInnes has admitted 'conduct unbecoming to a chief executive' but plans to fight the sexual harassment suit. Photo / Getty Images

SYDNEY - A disastrous week for Australian retailer David Jones was crowned yesterday by a report that high-profile designer Akira Isogawa is planning to defect to rival store Myer.

The report, which neither David Jones nor Isogawa would confirm, was the first indication a A$37 million ($46.2 million) sexual harassment lawsuit brought by a former company publicist Kristy Fraser-Kirk is damaging the brand.

With executives concerned about the scandal's impact on female shoppers, some in the industry have predicted an exodus of top designers.

The Australian reported yesterday that Isogawa had attended Myer's spring-summer collections launch, seated in the front row. It quoted him as saying: "I can't comment yet [about moving to Myer], because nothing has been confirmed yet, but I'm open to seeing what's out there."

The designer, whose label has been stocked at David Jones for more than 10 years, said of Fraser-Kirk: "I feel compassionate about what happened to her. It was horrific."

On Monday, on the eve of the David Jones collections launch, Fraser-Kirk launched a record Federal Court claim for damages against the store and its former chief executive, Mark McInnes. McInnes resigned in mid-June after the 27-year-old accused him of making unwelcome sexual advances and comments to her at two company functions. He received a A$2 million payout.

According to the Australian, Isogawa requested a ticket to the Myer launch, which he attended with his national sales manager. The newspaper said he had been talking to Myer for some months about jumping ship - initially out of discontent with David Jones' promotion of his label.

McInnes, who is in the United States with his pregnant partner, Lisa, intends to return to Australia to fight the lawsuit.

In a statement this week, he said that while he had made mistakes, "I reject many of the recent specific allegations and, legally, I have no alternative other than to vigorously contest them and I will".

Analysts were taken aback by Fraser-Kirk's claim. Unusually, sheis seeking punitive damages, asking for 5 per cent of the A$700 million profits David Jones made while McInnes was chief executive, plus2 per cent of his salary, or A$2 million.

David Jones shares, which fell to A$4.25 after the scandal broke, closed at A$4.72 yesterday.

SEX SCANDAL
* Former David Jones CEO Mark McInnes resigned in June after former company publicist Kristy Fraser-Kirk made harassment claims.
* At the time he admitted behaving "in a manner unbecoming of a chief executive to a female staff member" at two company functions.
* On Monday Fraser-Kirk launched Federal Court claim for damages against the store and McInnes.
* McInnes on Wednesday said he would return to Australia to "vigorously contest" the lawsuit.