David Jones CEO decides to stay on

David Jones chief executive Paul Zahra has decided not to resign, and will stay on at the retailer. Source: AAP

DAVID Jones chief executive Paul Zahra has reversed his decision to resign and will stay on at the retailer.

Mr Zahra announced in October 2013 he would step down once the company found someone to replace him.

But as the search dragged on, shareholders have been calling on Mr Zahra to stay.

There have also been major changes at David Jones in recent months.

In February, chairman Peter Mason announced his departure, following a controversial purchase of David Jones shares by two of the company's board members.

David Jones on Monday appointed a new chairman - former Westpac director Gordon Cairns - triggering Mr Mason's resignation.

The company has also received a $3 billion merger proposal from rival Myer, which David Jones is currently reviewing.

The company's sales have also improved, growing by almost five per cent in the three months to January 25.

"My commitment and loyalty has intensified in recent months given the changes and uncertainty that the business has experienced," Mr Zahra said in a statement on Tuesday.

"I am very grateful and humbled by the support I have received from our new chairman, the board, our shareholders and staff, and I feel a renewed sense of purpose and commitment to the business."

David Jones shares were down three cents at $3.35 at 1530 AEDT.