Conditions are tough at home, but ambitions are global for Smiggle and Peter Alexander

Solomon Lew’s Premier Investments is well aware consumers are being crunched by living costs, but the challenging economic outlook is no barrier to the multibillion-dollar retailer’s global ambitions.

Lew said when discussing on Thursday the group’s record $1.6 billion in retail sales that the Smiggle and Peter Alexander operator was planning for a good Christmas trading period, but he was under no illusions about the pressure his customers were under due to rising fuel, mortgage and electricity costs.

Peter Alexander sales jumped by 11.8 per cent. Credit: Edwina Pickles

“We think that those cost pressures are out of control, and we feel very, very much for the Australian consumer,” he said.

Growth of Premier’s marquee brands was firmly on the agenda on Thursday despite the tough outlook. The company highlighted that it had identified more than 30 opportunities for potential new stores for Smiggle and between 20 and 30 options for new or larger-format Peter Alexander sites in the near future.

Premier surprised the market in August when it revealed it was undertaking a strategic review of the business, which could include the demerger of its brands into separate ASX-listed companies.

The move sparked speculation from analysts about the potential of Premier’s stable of brands to succeed overseas. Lew was clear on Thursday that the business is pushing forward with international expansion plans independently of the review, which is expected to continue into the next calendar year.

“I think any of our brands could fit into the international market,” he said.

Premier revealed on Thursday that Smiggle was making a push into the Middle East through an agreement with its wholesale partner to open up to 60 freestanding stores across the United Arab Emirates, Qatar, Kuwait, Oman and Bahrain.

Sleepwear retailer Peter Alexander will also be testing the waters outside Australia and New Zealand, with the launch of a global e-commerce offer through the eShopWorld platform, which will give it access to 35 countries.

“We are ready to go now, and it will be interesting to see what countries and where the volume will come from. We are very excited about that opportunity,” Lew said.

Sales at Peter Alexander jumped by 11.8 per cent to $478.9 million for the 2023 financial year, while Smiggle stores posted a 22.4 per cent increase to hit $319.8 million. Premier’s five apparel brands, which include the likes of Portmans and Just Jeans, increased sales by 4.6 per cent for the year to $844.8 million.

Earnings before interest and tax for the group’s retail brands also hit record levels: up 6.4 per cent to $356.5 million.

Premier’s net profit after tax slipped by close to 5 per cent for the year to $271.1 million, though this was impacted by changes the company made to accounting for its investments, which include a more than 25 per cent stake in Myer.

A recent trading update showed evidence of weakening consumer confidence, with group sales for August and into September down by 2 per cent on the same time last year – though Premier said it was looking forward to the Christmas trading quarter, which has a significant impact on the company’s results.

The company announced it had signed an agreement with an existing wholesale partner to open standalone Smiggle stores in United Arab Emirates, Qatar, Kuwait, Oman and Bahrain.Credit: Edwina Pickles

Investors will see a beefed up final dividend of 60¢ per share, up 11.1 per cent on last year’s final payout. The fully franked payment will be made on January 24 and pushes the total full-year payout up by 4 per cent to $1.30.

Jarden retail analyst Ben Gilbert said the company’s trading update was better than expected. “Net-net good result, should be taken positively with key for us being cost outlook and strategic review thoughts on the call,” he said in a note to clients.

Shares opened stronger but were down 0.4 per cent to $24.61 just after 2.30pm.

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