Premier CEO Mark McInnes lashes landlords for playing favourites

Landlords’ sweetheart deals with the likes of Uniqlo and H&M are killing local retailers, says Premier’s Mark McInnes.

Premier Investments chairman Solomon Lew with CEO Mark McInnes (left) at the company’s AGM in Melbourne. Picture: Aaron Francis

Premier Investments chief executive Mark McInnes has launched a blistering attack on the nation’s shopping centre landlords accusing them of “killing companies and killing jobs”, as landlords incentivised overseas chains to come to Australia and ruin the sector.

Savaging of the behaviour of landlords, the Premier CEO said they were offering better deals to foreign chains than Australian retailers and in the process were “killing Australian jobs”.

Mr McInnes and Premier chairman billionaire retailer Solomon Lew have long criticised landlords for charging excessive rents that were way out of step with current economic settings, but the attack by Mr McInnes was the strongest and most ferocious to date.

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Speaking to The Australian after Premier’s annual general meeting in Melbourne, Mr McInnes said the fault for many failed retailers and a poorly retail sector could be laid at the feet of landlords.

“Landlords have incentivised international retailers into this space, they have diluted the market and killed companies,” Mr McInnes said.

“And Bardot is just one of those.”

Bardot, which has 72 stores and employs 800 people fell into voluntary administration on Thursday; the latest in a long line of retailers to fail.

Landlords were “incentivising H&M, Uniqlo and offering them more capital and better deals than they are offering Australian retailers, they are bringing down Australian companies, they are killing Australian jobs and killing Australian retailers”, Mr McInnes.

Mr McInnes said he had been demanding for years that shopping centre landlords offer local retailers the same types of rent and capital deals they were offering international retail chains.

“And that is the major reason why what has happened to Bardot has happened to Bardot.”

“All landlords. Killing them,” Mr McInnes said.

‘Adapt and thrive’

Mr McInnes comments came after Premier Investments chairman and retail billionaire Solomon Lew lauded the financial and operational strength of the company and its portfolio of retail chains.

Mr Lew said the group was thriving at a time when global economic uncertainty was causing upheaval.

Addressing shareholders at the $3 billion fashion group’s annual general meeting in Melbourne on Friday, Mr Lew also said that its Smiggle brand was continuing its global roll out as it seeks new retail channels with Smiggle recently launching into South Korea, Thailand, Indonesia, Philippines, United Arab Emirates, Canada and Qatar via wholesale partnerships with iconic retailers.

“2019 was another outstanding year for Premier, with your business performing very strongly at both the top line and the bottom line. However, yet again, this performance was set against a backdrop of declining consumer confidence and the uncertainty surrounding the outcome of the federal election in Australia,’’ Mr Lew said in his chairman’s address.

“It is in this context – and against a tumultuous global economic and political backdrop – that your company continues to adapt and thrive.”

Solomon Lew (centre) at the Smiggle shop in Bourke Street, Melbourne.

Premier’s stable of retail brands include Smiggle, Just Jeans, Jacqui E, Jay Jays, Portmans and Peter Alexander.

“In the 2019 financial year, Premier delivered net profit after tax of $106.8 million, up almost 28 per cent. On an underlying basis, net profit before tax was $177.6 million with strong contributions from Premier Retail and our investment in Breville Group.”

He said Premier also maintains an investment in Myer Holdings, and had $190.3 million of free cash on hand as at year end.

“Today, Premier is a business with a retail and consumer products portfolio that is truly global. All seven Premier Retail brands have a presence in both Australia and New Zealand and a strong online offering. Smiggle is now available in 14 countries including the United Kingdom, Republic of Ireland, Singapore, Hong Kong and Malaysia.

“Meanwhile, our strategic investment in Breville is performing strongly as the company continues to expand in North America and Europe with a focus on technology and innovation. More than two thirds of Breville’s revenue is now generated offshore.

“Our objective is to accelerate Smiggle’s global growth using four major pathways, namely: global wholesale arrangements; online growth; concession partnerships with iconic global retailers; and new store growth where the economics and shareholder returns are attractive.”