Jay Jays, Dotti, Portmans still ‘well-loved, cherished’ brands, Myer CEO insists

Myer investors have waved through a deal that allows the underperforming department store to absorb and operate the Jay Jays, Just Jeans, Dotti, Portmans, and Jacqui E brands that executive chair Olivia Wirth and billionaire ragtrader Solomon Lew insisted were still beloved by customers.

The overwhelming majority of Myer shareholders (96.2 per cent) voted in favour of the proposal to absorb the suite of labels known as Apparel Brands after an extraordinary general meeting in Melbourne on Thursday morning.

Olivia Wirth, executive chairwoman of Myer, with Solomon Lew who offloaded his apparel brands business and will take a board seat at the department store chain.Credit: Eugene Hyland

In response to a question from a shareholder who accused Wirth of pushing an overpriced deal to take on “declining B-grade brands”, the chief executive insisted the merger would put Myer in a better position in the long term.

“Let me be very clear: this was not about a short-term sugar-hit,” she said, adding that the department store had done its due diligence about the popularity of Apparel Brands among consumers.

“They are well-loved, and they are cherished, and they are heritage brands … Many of these brands have been around for decades,” said Wirth.

“We will continue to invest in them to make sure that they are relevant and compelling offerings for all age groups, whether it’s the younger ones with Dotti and Jay Jays, or it’s the older customers in Jacqui E, or it’s those starting their first job.

“I know where I bought my first suit when I left university; it was Portmans.”

Myer is purchasing Apparel Brands from Lew’s Premier Investments, which also operates Smiggle and Peter Alexander. Lew, who is still the largest Myer shareholder, will gain a seat on the board.

Lew also rejected suggestions that the brands were losing relevance with younger consumers, insisting that the decline in sales was due to cost of living pressures constraining shoppers’ willingness to spend.

“Of course, it’s cyclical. We’ve got huge market share; in those brands, Jay Jays and then Just Jeans, we’re the biggest sellers of denim in the country,” he said after his company’s general meeting held at 11am.

“I think they’re more relevant [now than in the past]. I really do.”

Myer investors have embraced the $950 million deal that will allow the department store to operate Jay Jays, Just Jeans, Portmans, Dotti and Jacqui E.Credit: Edwina Pickles

Myer’s share price rose throughout the day and closed 6.1 per cent higher, while Premier shares fell by 0.7 per cent.

The merger will bring Myer’s store footprint to 783 and workforce to 17,000 people. The combined group’s annual sales are projected to exceed $4 billion.

Myer hopes the newly acquired brands and stores will strengthen its loyalty program Myer One, improve online sales and help turn around the ailing performance of its exclusively owned brands sass & bide, Marcs and David Lawrence.

“They are good brands, but clearly have been underperforming, but they do have strong brand presence in the market,” Wirth said. “We believe with the right IP, the right capability, skills, [and] focus, we can actually improve those brands over time.”

Myer would “continue to consider the in-store experience,” but Wirth declined to provide further details about store plans, saying it was early days and promising more information at the company’s investor day in late March.

Wilson Asset Management senior investment analyst Shaun Weick said “optimising the store base” would be a key part of Myer’s strategy, but that Wirth had to be careful about announcing store changes due to sensitivities regarding newly acquired staff.

“It becomes a question of whether [all the stores] are all required,” he said. “I think over time, they’ll gradually weed out the store base, and they’ll be able to take pretty material costs [out].”

Premier’s votes collected after its general meeting showed nearly all shareholders (99.9 per cent) favoured the deal that will allow Myer to gain the five brands and $82 million in cash in exchange for 890.5 million Myer shares issued to Premier shareholders, representing 51.5 per cent of Myer’s holdings. Every Premier shareholder will receive around 7.2 Myer shares per Premier share.

The merger means Premier will no longer hold shares in Myer, though Lew will remain the department store’s biggest investor through investment vehicle Century Plaza Group, which holds a 26.8 per cent stake.

Independent advisor Kroll said the deal was “fair and reasonable” even after a disastrous trading update showed sales had slid backwards in the second half of 2024, resulting in a 23.1 per cent plummet in Myer’s share price that day.

Lew’s Premier Investments still retains the more popular Smiggle and Peter Alexander brands, both of which are in the process of being spun off into its own ASX-listed company and seeking international expansion.

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