Myer: Solomon Lew’s Premier Investments slams “desperate, shameful” department store

Myer has been slammed by its biggest investor which said it seems determined to become the “world’s most expensive post office”.

Myer’s biggest shareholder has lashed out at the department store calling its slump into loss “disastrous and shameful,” the company “desperate,” and demanding the entire board resign.

Premier Investments, which owns retailers Just Jeans, Smiggle and Peter Alexander, said Myer’s only turnaround plan appeared to be a hook up with online retailer Amazon that would turn it into “the world’s most expensive post office”.

Premier, whose chairman is outspoken retailer Solomon Lew, holds almost 11 per cent of Myer stock making it the single biggest shareholder.

However, Premier itself has come under fire after it said last month it expected to post a record profit, of potentially up to $185 million, while it has also taken advantage of the Federal Government’s JobKeeper program to subsidise wages. According to some reports, Premier may have claimed tens of millions of taxpayer dollars.

The firm also refused to pay rent on many of its stores during the height of the pandemic.

RELATED: Move by insurers an ‘ominous’ sign of Myer financial health

Myer has fallen into loss due to the pandemic. Picture: AAP Image/Joe Castro.

‘WORLD’S MOST EXPENSIVE POST OFFICE’

On Thursday, Myer said it had lost $172.4 million in the last financial year, a steep drop from 2019’s $24.5 million profit.

It said sales fell almost 16 per cent to $2.5 billion for the financial year after widespread store closures during the nationwide lockdown.

Online sales grew 99 per cent in the second half of financial year compared to the prior year. The significant increase in online sales made up 17 per cent of total sales for the department store.

The growth in online sales was bolstered by agreements with Australia Post and Amazon.

Myer recently introduced Amazon Hub – Amazon parcel pick-up points at Myer Click & Collect counters – in 21 stores. A deal with Australia Post has also helped to deliver products to customers.

“These new warehouse and fulfilment arrangements will underpin the next stage of growth in Myer’s online business delivering benefits to Myer’s customers as well as providing significant cost savings,” CEO John King said.

However Premier laid into the Amazon deal as an example of where Myer was “lost”.

“Myer appears to be transforming itself into the world’s most expensive post office. Its latest deal hinges on the hope Amazon customers buy something else on whim when they collect product from the Myer badged post office. It is desperate and sums up just how lost Myer is,” the statement said.

RELATED: Kmart boss hits out at Melbourne restrictions

Premier Investment’s Soloman Lew took aim at Myer and its management. Picture: Aaron Francis/The Australian

Premier called for the “immediate resignation of the Myer board” and for an “urgent” management overhaul.

“Today’s results are disastrous and shameful. Two years into John King’s tenure – it’s clear the Myer turnaround is in tatters.

“As a long-suffering investor and supplier, Premier itself is perplexed.

“The numbers are dire – notwithstanding the impact of COVID-19, the business is trading beyond poorly,” it added.

Premier own stationery shop Smiggle. Picture: Peter Wallis.

“In exchange for delivering today’s statutory net loss after tax of $172.4 million – the second biggest loss in Myer’s history, Chairman Gary Hounsell has been paid $246,000, while John King pocketed $1.59 million,” the statement said.

“Yet again Myer shareholders have been taken for a ride.”

Myer CEO John King. Picture: Stefan Postles.

LONG HISTORY BETWEEN PREMIER AND MYER

Premier has a long history of attacking Myer and there is no love lost between the two retailers. Despite Mr Lew’s Premier holding one in ten Myer shares, the department store has fended off attempts by the company to have representation on the board.

At the results announcement, Myer’s Mr King said shutting all 60 stores in April and May, cutting wages and standing down approximately 10,000 team members was a hard decision.

“Closing the stores is one of the toughest decisions faced in our history,” Mr King said.

Ongoing restrictions in Melbourne are still affecting store closures.

The retailer received $93 million in JobKeeper payments, while $41 million was paid to employees whose remuneration was lower than the required income threshold.

Wages fell by $73 million as the firm stood down staff.

As more people are stuck at home, Myer has seen changed behaviour in its customers with items such as cooking appliances, casualwear and athleisure becoming more popular.

“Myer looks ahead to a permanently-changed CBD landscape with workers working from home,” Mr King commented.

- with Kathy Skantzos.