This article is from the Australian Property Journal archive
PREMIER Investments chief Solomon Lew has called on “fellow long suffering Myer shareholders to take action” at the embattled major department store’s annual general meeting in Melbourne, while it challenged retail landlords to meet the “changing consumer market” and take down rents or face a loss of tenants.
Addressing his own shareholders at the Premier AGM yesterday, Lew said the group has “long been calling for the Myer board to be replaced with a new independent board with the requisite skills to actually deliver for shareholders – the most important skill being retail experience, which the current board conspicuously lacks.
“Boards exist to create value, not to destroy value while rewarding themselves. We continue to use all of the options at our disposal to ensure the protection of our investment.”
A second strike at the Myer AGM in Melbourne – which would need 50% to pass after last year’s first strike – would trigger a spill motion.
Lew holds a 10.8% share via Premier Investments and has been publicly critical of the Myer board over a sustained period of weak performance, which included the group’s first annual loss following a colossal $515 million write-down of goodwill and brand names, subsequently forcing changes at senior level.
It revealed earlier this month its total sales value was for the quarter was in fact down by 4.8%, and by 4.3% on a comparable store basis, while total online sales grew by 3.6% over the period.
Myer last week accused Lew of “trying to get Myer on the cheap” following Lew’s interview with Elysse Morgan on The Business, which was aired on the ABC.
Morgan suggested Premier Investments “trying to take control of Myer without actually having to actually pay a premium to take control, and it would have big benefits for your company Premier if you do get control”.
Lew eventually said Premier is saying “categorically it is not making a takeover bid and at this point of time definitely not buying any shares”. It currently owns a 10.8% stake in Myer.
Myer took to the ASX to say the broadcast statements were unqualified.
“The effect of these comments is that Premier is currently prevented from making a takeover bid for Myer under ASIC’s Truth in Takeovers policy and it will continue to be prevented while this policy applies. Having expressly ruled out paying a premium to obtain control, the only way in which Premier may obtain control of Myer is through a board spill.
“The Myer Board continues to believe that if Premier wishes to obtain control of Myer then it should pay shareholders a control premium.”
Premier Retail delivered an 8.2% increase in total sales of $1.18 billion for the 2018 financial year, and a record underlying EBIT of $150.1 million, up 10.3%, based on strong growth of its online platforms, Smiggle globally, Peter Alexander its apparel brands, “achieved despite significant external headwinds and the structural challenges in the retail industry globally”, Lew said.
“While we believe our best in class online offering will continue to be a key driver of sales, we also recognise that customers want to experience a world class in-store shopping experience. That’s why we have continued to invest heavily in new flagship stores and the refurbishment of existing stores across our brands,” Lew said.
Premier Investments closed 17 stores in the 2018 financial year, for a total of 103 over the last six years.
“We continue to press landlords to offer rent in line with the changing consumer market and their own centre performance and further closures will occur for those landlords who do not respond to these changing market conditions.
“In the next few months we will be closing three unprofitable stores on Chapel Street, South Yarra, Victoria due to landlords’ unrealistic expectations and inability to understand the changing market structure. The move is a true symbol of the changing nature of the retail market as Chapel Street was the location of Just Jeans first store and therefore the birth of the Just Group.”
Myer meanwhile, has said that while further store closures are unlikely, surplus floor space could be handed back to landlords that might find a better use in food and services operators, while it is looking to optimise its retail offering and boost online sales.
Australian Property Journal
