The sudden resignation of Terry McCartney, the head of the Myer Grace department-store division, has upset succession plans at Australian retailing giant, Coles Myer.

McCartney, who resigned yesterday, had been instrumental in managing the recovery in earnings at the Myer Grace Brothers department store and had been considered a strong contender for Eck's position at the end of his fixed-term appointment in two years.

Sources said McCartney's decision to quit follows an announcement earlier this week by Coles Myer chief executive, Dennis Eck. Eck proclaimed that former American Kmart executive, Warren Flick, had been appointed as chief operating officer of the Myer Grace division and Coles Myer's apparel and homewares division. McCartney is rumoured to be disgruntled that he was not properly consulted about the appointment.