By Emma Koehn
Billionaire rag trader Solomon Lew says the board at department store Myer “has got a long way to go”, reiterating his desire to add more seasoned retail talent to the board, despite the store recently posting its best result in years.
Lew is getting ready to pocket a bumper dividend windfall thanks to his ownership stake in Premier Investments, which in addition to Myer includes children’s stationery brand Smiggle and pyjama retailer Peter Alexander, after Premier posted a record $1.5 billion in sales for the 2022 financial year.
Premier Investments chairman Solomon Lew (R) and retail boss Richard Murray in a Smiggle store. Credit: Eamon Gallagher
The retail juggernaut will pay a dividend of 54 cents a share and declared a special dividend of 25 cents, bringing the total annual payout to $1.25 a share. Lew’s family holds a 42.43 per cent stake in Premier, meaning he’ll receive about $84.4 million in dividends for the full year.
Premier also owns a 22.87 per cent stake in Myer, and Lew has been trying to shake things up at the department store for more than five years, arguing the company has lagged ever since it floated on the ASX in 2009.
Myer has so far fended off his attempts at an overhaul, including Lew’s bids to install board members such as former Myer Grace Bros boss Terrence McCartney in previous years. The department store posted its strongest result in years last month - but Lew says there is still work to do.
“I think that [CEO] John King is currently working somewhat smarter, but you know, they’ve got three billion in sales and less than 2 cents [in the dollar] in profit - they’ve got a long way to go,” he said.
Myer reported just under $3 billion in sales for the 2022 financial year and a net profit after tax of $49 million.
Documents lodged with the ASX last month signalled Premier intends to once again nominate Terrence McCartney to join the Myer board at the company’s annual general meeting in November.
Lew said McCartney’s decades of experience in the sector would be of great value to the department store’s board.
“Obviously, we are talking about a very seasoned, very qualified retailer... you are talking very high quality. That can only assist the company, assist the shareholders, and assist the repair of the massive losses that shareholders have had to stand for a long period of time.”
Premier Investments chief executive Richard Murray delivered a 4.9 per cent increase in net profits to $285.2 million in his first annual result for the company since he joined the business from JB Hi-Fi.
Murray was optimistic about the continued appetite for Australians to spend despite cost of living pressures. He said the retailer’s focus on core and basics clothing put it in a good position.
“We are not a runway, catwalk retailer that has a high proportion of high fashion... we can manage the risks of slowdown, if there is one in the second half,” he said.
Peter Alexander and Smiggle helped power Premier’s 2022 results, with the return to in-person schooling helping the brand bounce back strongly from COVID-19 lockdowns.
Smiggle sales were up 24.6 per cent on last year to $261.2 million and customers have continued to spend strongly into the first weeks of the new financial year, the company said.
Peter Alexander hit another record sales number this year, up 11.4 per cent to $428.5 million.
Premier investors responded warmly to the company’s earnings figures and shares closed 14.6 per cent higher to $23.69.
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