David Jones chief executive Mark McInnes has resigned over incidents involving a female staff member.
Mr McInnes issued a statement to the ASX on Friday announcing that he had ended his seven-year term at the department store because of two incidents of "unbecoming behaviour" towards a female staff member at company functions.
The ABC reports the incidents took place at two work functions.
Company chairman Robert Savage said later he first became aware a week ago of the behaviour of Mr McInnes.
He said the board is addressing a complaint made by lawyers for the employee.
Mr Savage said the woman still works for the company and is held in high regard. He said he hopes she continues her career with David Jones.
In a statement issued earlier, Mr McInnes said he planned to be overseas for the foreseeable future.
David Jones stocks took a battering in early trade following the announcement of the resignation.
Shares plunged 4% when the ASX opened, but recovered to finish flat at the close of trade.
The board has appointed a new chief executive, Paul Zahra.