Billionaire resumes board assault with demands for CEO to quit
Retail billionaire Solomon Lew has resumed his campaign to shake up Myer, calling for chief executive John King and the department store chain’s board to be sacked saying the retail giant is “lost” and in need of “immediate change”.
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Major Myer shareholder and retail billionaire Solomon Lew has resumed his campaign to shake up the department store chain, calling for its chief executive and board to be sacked.
The salvo from Mr Lew — who has held fire in his battle with Myer over the past year — came as the coronavirus pandemic dragged the chain to the second-biggest loss in its 120-year history.
Mr Lew said a turnaround plan rolled out by Myer chief John King was failing to gain traction while a ramp-up in its online business was hurting its profit margin due to “antiquated” systems.
“Today’s results are disastrous and shameful,” Mr Lew’s Premier Investments said in a statement on Thursday.
“Two years into John King’s tenure it’s clear the Myer turnaround is in tatters. It’s now time for the CEO to follow the board through the exit.”
Mr Lew is the biggest shareholder in Premier, whose stable of retail brands includes Just Jeans, Smiggle, Portmans and Peter Alexander.
Premier, in turn, is the biggest shareholder in Myer, having snared an 11 per cent stake at $1.15 a share in early 2017.
Myer’s share price dropped 4.5c, or 18 per cent, to 21c on Thursday.
Premier has repeatedly pushed to topple Myer’s board but Thursday’s statement was the first time Mr Lew called for Mr King to be dumped.
Mr Lew slammed Myer’s decision to introduce Amazon collection points. The initiative will allow Amazon customers to collect their orders from some Myer stores — a partnership Myer hopes will boost foot traffic and lead to impulse purchases.
“Myer appears to be transforming itself into the world’s most expensive post office,” Mr Lew said.
“It is desperate and sums up just how lost Myer is.”
He also took aim at high-profile stock picker Geoff Wilson. Mr Wilson, who founded Wilson Asset Management, is the second biggest Myer shareholder but has so far backed its board and chief.
“The arrogance displayed by Mr Wilson in backing a failed accountant as chairman of Myer over the wealth of retail experience in Premier is breathtaking,” Mr Lew said.
“Mr Wilson should now acknowledge that the continued failure of Myer is at least partially his own fault and his investors should hold him to account for the losses they have sustained and will continue to endure unless there is immediate change.” Myer posted a net loss of $172.4m for the year ending July 25 as the coronavirus pandemic forced it to shutter its stores and stand down 10,000 workers.
Sales dropped 15.8 per cent to $2.52bn.
While total sales were down, online sales surged 61 per cent to $422.5m.
Cosmetics sales were up 218 per cent, homewares up 177 per cent and intimate and activewear sales were up 144 per cent.
Myer shut all 60 of its stores for most of April and May, and its Melbourne stores have been shut under the city’s second lockdown.
Mr King said: “We are now living in a new world, a COVID world, which has fundamentally changed consumer behaviour and I believe these changes are here to stay”.
Myer aims to grow its online sales to $1bn in the coming years.
“We have been able to capitalise on the online boom and a key factor in this is the trust of the Myer brand,” Mr King said.
“In times of uncertainty and when people turn to online shopping for the first time, people will turn to brands they trust.”
Myer collected $93m in JobKeeper payments.