Solomon Lew resumes feud with Myer, widens attacks to CEO, Geoff Wilson

Shareholder Solomon Lew has reignited attacks on Myer after its $172m loss, and he’s taken a swipe at Geoff Wilson too.

Solomon Lew says Myer’s turnaround is in tatters. Picture: Aaron Francis

Myer’s biggest shareholder, retail billionaire Solomon Lew, has resumed his bitter public campaign against the department store by calling for the resignation of its board and for an urgent management overhaul following its $172.5m loss.

Mr Lew has attacked Myer’s board before but now, for the first time, he has turned his corporate guns on chief executive John King, demanding he follow the board out the door.

“Today’s results are disastrous and shameful,” Mr Lew said in a statement through his ASX-listed Premier Investments.

“Two years into John King’s tenure – it’s clear the Myer turnaround is in tatters. It’s now time for the CEO to follow the board through the exit.”

Mr Lew first attacked the Myer board three years ago when his Premier Investments bought an 11 per cent stake in the struggling department store. He called for board resignations and savaged the company at its annual meetings as he tried to eject directors.

In the past year he has been silent, especially after Mr King took over as CEO. But with Thursday’s release of Myer’s 2020 results, Mr Lew has resumed his public attacks.

“The numbers are dire – notwithstanding the impact of COVID-19, the business is trading beyond poorly – sales are down, EBITDA is down – on top of massive further writedowns to its brands and leases,” he said.

“Myer is crowing about its online offering, yet by its own admission online sales are actually eroding profits. After years of underinvestment, its antiquated online offering is dilutive to EBITDA margins.”

Mr Lew’s statement said that more than two years into Mr King’s “turnaround”, it “remains unclear what Myer stands for in the eyes of customers”.

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

He also attacked a recent click and collect deal Myer struck with Amazon.

“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.

“It must be close to the end for suppliers who can no longer obtain credit insurance cover.”

Mr Lew revealed his private companies, many of which are leading suppliers to Myer, have dramatically reduced their own exposure to the department store chain.

“And we are aware that other leading suppliers are hesitant to do business, particularly with the banks controlling the security.”

Mr Lew said fund managers Investors Mutual saw the writing on the wall and “bailed over the last six months, losing over 80 per cent” of its investment along the way.

He then savaged Myer’s other large shareholder, funds manager Geoff Wilson, who has been supportive of the Myer board.

“These results are also to the great discredit of Geoff Wilson. The arrogance displayed by Mr Wilson in backing a failed accountant as chairman of Myer over the wealth of retail experience in Premier is breathtaking.

Geoff Wilson copped a serve from Mr Lew too. Picture: David Geraghty

“Mr Wilson should now acknowledge that the continued failure of Myer is at least partially his own fault and his investors should hold him to account for the losses they have sustained and will continue to endure unless there is immediate change.”

The Premier Investments statement said that in exchange for delivering Thursday’s statutory net loss after tax of $172.4m, the second biggest loss in Myer’s history, chairman Gary Hounsell has been paid $246,000, while John King pocketed $1.59m.

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