Billionaire retailer Solomon Lew has renewed his attack on Myer's board after the iconic retailer fell to an almost half-billion dollar loss, and has demanded that chairman Garry Hounsell stand down or risk being booted out by angry shareholders.
Mr Lew's listed retail vehicle Premier Investments - Myer's largest shareholder with an 11 per cent stake - has been waging war against the company for more than a year in a campaign to have his own own directors appointed to the board.
Retail billionaire Solomon Lew has stepped up his attack on the Myer board after the company's almost half-billion dollar loss.Credit: Jesse Marlow
Myer has resisted this, saying it would be too great a conflict of interest because Premier is both a competitor and supplier to Myer through its brands, which include Just Jeans, Peter Alexander, Portmans, and through companies linked to the Lew family.
Myer on Wednesday reported a statutory net loss of $486 million for the 2018 financial year, compared to an $11.9 million profit a year earlier, driven by falling sales and a $515 million writedown to the value of Myer's goodwill and brand name.
Even without one-off charges, Myer's profit fell 52 per cent from $68 million last year to $32.5 million, which chairman Mr Hounsell said was "disappointing".
Mr Lew said that for once, Premier agreed with Mr Hounsell, who it has criticised for his lack of retail experience.
"Myer shareholders have spent the last year paying for Garry Hounsell’s retail traineeship," Mr Lew said. “Mr Hounsell must step down immediately or risk having his board spilled by a strong shareholder revolt at the upcoming AGM."
Myer's sales and earnings have been falling in recent years. Credit: Peter Rae
Mr Hounsell said his board had acted decisively when it realised the business was not going to improve earnings and fired former CEO Richard Umbers to bring in new CEO John King and other new senior executives.
Myer suffered a "first strike" at last year's annual general meeting. Another protest vote of more than 25 per cent against its remuneration report would see the entire Myer board spilt and each director forced to stand for re-election.
"Shareholders deserve better": Myer CEO John King.
Retail veteran Mr Lew, who's also a former Coles Myer chairman, said the current Myer board was "an absolute disgrace".
"Premier will move forward to protect all shareholders, staff and stakeholders. We will not allow this failed board of directors... to run Myer into the ground.”
Banks in charge
Myer said that its bankers had agreed to give it more breathing room by agreeing to refinance $400 million of debt, pushing its due date out from August 2019 to February 2021, and relaxing its debt convenants.
Under the refinancing, the loans have gone from being unsecured to secured, which Mr Lew said represented the banks being put "firmly in control of Myer".
"This will further erode Myer’s goodwill with its partners," he said.
Myer said the security was usual for a loan of that nature.
'Shareholders deserve better'
John King, who took on the top job in June, said the results were "obviously disappointing and shareholders deserve better."
Mr King said Myer had a plan to turn its fortunes around by putting customers "first in everything we do".
"We know our customers want high quality, on trend products, at the right price, supported by great customer service," he said.
The underlying result was slightly below market analysts' consensus forecast of $33 million.
Myer's shares, which listed in 2009 at $4.10 a share, closed down 4.6 per cent at 41¢.