Retail expert warns closures will come if brands aren’t supported
A retail expert who has been in the game more than 50 years says he has not experienced anything like the rapidly snowballing economic fallout caused by coronavirus and he warns closures will come if brands aren’t supported.
Business
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The retail giant behind brands including Just Jeans, Smiggle and Peter Alexander has warned it will be forced to make widespread store closures if landlords do not cut rents in response to the coronavirus pandemic.
Premier Investments chairman Solomon Lew, whose retail career spans more than 50 years, said he has not experienced anything like the rapidly snowballing economic fallout triggered by COVID-19.
“This is unprecedented – not in our lifetime have we ever experienced anything like this pandemic, so the sooner it ends the better,” the billionaire retail veteran said.
“The government is throwing everything at it and will be committed to throw more at it. They are making all the right decisions at this time.”
Premiers’ stable of fashion brands also includes Jay Jays, Portmans, Jacquie-E and Dotti.
The Melbourne-based fashion giant operates close to 900 stores across Australia and more than 1250 globally.
Chief executive Mark McInnes said major shopping mall owners and other landlords needed to work with retailers to map out a survival plan for the sector.
This meant rents needed to be cut to keep retailers in business, Mr McInnes said.
“Landlords have a major role to play to ensure retailers can operate in the short-term for the long term benefit of all stakeholders,” he said.
“It’s not an us and them thing. In many ways we should be aligned on this. We are not talking about profiting here. Historical rents are just that – they are history.”
More ominously, Mr McInnes pointed out that the leases of 70 per cent of Premier’s store network in Australia and New Zealand expired this year or could be broken within 30 days.
“We can give 30 days’ notice – it’s not what we want to do but if landlords force us to do it we will have to,” he said.
“Since the outbreak of COVID-19 we have closed two stores in Hong Kong and we are prepared to close many more stores globally if landlords do not respond to the current crisis.”
The former David Jones chief said the nation was facing a consumption crisis as people stopped spending.
Incoming government economic stimulus measures needed to hone in on getting cash into households, he said
“If you stimulate consumption you stimulate employment and that stimulates the economy,” he said.
The comments were delivered as Premier posted a 12.2 per cent jump in profit to $99.6 million for the 26 weeks to January 25 as Smiggle and Peter Alexander threw off record sales.
Mr Lew said Premier had shown is could handle significant hardship having just grown its profits while trading through Brexit, Hong Kong protests, Australian bushfires and a fall in the Australian dollar which made imports more expensive.
“The group will be ready to bounce back as soon as possible,” he said.
Shares in Premier were up by close to 12 per cent to $11.59 in afternoon trade.