This article is from the Australian Property Journal archive
BILLIONAIRE retailer and combative major shareholder Solomon Lew has finally secured a seat on the board of Myer, in a $950 million deal that will boost Myer’s portfolio by 719 stores tenanted by the likes of Jay Jays, Just Jeans and Jacqui E.
They fall under Lew’s Premier Investments’ Apparel Brands, which also include Dotti and Portmans, and will become part of the major department store. Premier Investments will focus on and invest growing the successful Peter Alexander sleepwear and Smiggle stationery brands.
Peter Alexander’s sales have more than doubled since FY19 and is planning offshore market expansion following the opening of a new expanded flagship store in Chadstone, wile Smiggle operates more than 300 stores in Australia, New Zealand, Singapore, Malaysia, United Kingdom and Ireland.
Myer had made an all-scrip proposal in June to acquire Premier apparel brands. Following the transaction, which is expected to complete in early 2025, Myer will have $4 billion in revenue and $152 million in earnings on a pro forma FY24 basis, a combined footprint of 783 stores, a portfolio of eight specialty retail brands, and the brands sold through the Myer store network.
The combined workforce will be circa 17,300-plus employees.
Lew will have a seat at the table with a 26.8% share in Myer behind him, down slightly from 31.2%.
“This is an opportunity for our team and our shareholders to play an important role in the future of the Australian and New Zealand retail landscape. Myer and our Apparel Brands will be stronger together – delivering vertical integration, scale, additional margins and loyalty opportunities,” he said.
Myer executive chair, Olivia Wirth said Myer and Apparel Brands have “highly complementary store footprints and customers who will benefit from an expanded omni-channel ecosystem that enables them to engage with the group’s loved brands when and how they want.
“The combination will create significant opportunities to supercharge our leading Myer one loyalty program through greater reach, enriched data, enhanced cross-shop opportunities and increased personalisation to drive incremental sales growth.”
The deal will also see Myer issue 890.5 million new, fully paid ordinary shares to Premier upon completion in consideration for Just Group and the contribution of $82 million of cash by Premier. The Myer board will declare before completion a fully franked dividend of 2.5c per share to existing Myer shareholders, provided all conditions to the transaction have been satisfied.
Lew has been a vocal and consistent critic of Myer’s board and direction, and has previously made a play at the board.
During the pandemic, pressure from Lew and second-largest shareholder Geoff Wilson of Wilson Asset Management forced Myer chairman Gary Hounsell to step aside just hours ahead of an annual general meeting, having already decided to reduce the number of directors on its board under pressure from Wilson following hefty losses loss as the pandemic smashed in-store trading.
At the time, Premier was sailing through the COVID era on the back of strong online sales, control over its supply chain, and favourable rent agreements with landlords.
Prior to the pandemic, Myer had flagged further space handbacks and store closures as its struggled in the difficult retail environment, having closed tens of thousands of square metres of retail floorspace..
