It turns out there are about $80m reasons why one of Margin Call’s favourite billionaires in Solomon Lew is complaining.
Sure, the retailing magnate is stuck in Melbourne rather than the Mediterranean this year due to the pesky pandemic with his superyacht Maridome sitting idle in Mataro, near Barcelona, and Lew sitting idle in Toorak.
Barcelona and the Mediterranean are best known for fun, frivolity, sunshine and good times. Melbourne is currently known for absolutely none of that. That must have put Solly on edge already.
But Bleak City is synonymous with Myer, that once legendary retailer now falling on hard times — to say the least. And Solly has made it clear that is why he really isn’t happy.
Lew’s Premier Investments spent about $100m buying what was then a 10.77 per cent stake in Myer in late May 2017 at an average of almost $1.15 a share.
At the close of trading on Thursday, Lew’s stake in Myer was worth about $18m, as the company slumped to a $172.5m loss and then saw its shares fall almost 18 per cent for the day.
As has become his habit, Lew hit out at the Myer board and management in a statement, labelling the result as “disastrous and shameful” and that the turnaround plan under CEO John King was “in tatters”.
But then in the business equivalent of killing Bambi, Lew trained his sights on bespectacled fund manager Geoff Wilson, who innocently grew up in Melbourne reading the sharemarket pages and has since gone on to pick stocks.
“These (Myer) results are also to the great discredit of Geoff Wilson. The arrogance displayed by Mr Wilson in backing a failed accountant (Gary Hounsell) as chairman of Myer over the wealth of retail experience in Premier is breathtaking,” Lew thundered.
It was Wilson, after all, who famously saved the nation’s pensioners their franking credits last federal election with a voluble campaign against Bill Shorten and his Labor Party policy, maybe even helping Scott Morrison remain as Prime Minister in the process.
OK, maybe that is taking it a bit far, and Wilson has engaged in a bit of corporate raiding and taking over of listed investment companies himself. He knows his way around the corporate scene.
But he was bemused by Lew’s personal attack on Thursday, saying his Wilson Asset Management only has a fraction of Myer shares and that “I have a lot of respect for Solly Lew as a retailer, he’s one of Australia’s greats”.
Wilson then went on to list all the retailers he has owned and which have performed well, including Adairs, Temple & Webster, Redbubble and Kogan.com.
When pressed though, Wilson admitted he didn’t currently hold any shares in Lew’s Premier Investments! But he has in the past.
We have wondered whether this is all a bit of show by both parties, though they claim there’s no games being played. About all they have in common, apparently, is they want Myer to perform a bit better.
Gnawing at King
As if things weren’t tough enough for Myer boss John King, given he is not only running the embattled retailer but also living in locked-down Melbourne.
King told this newspaper’s retail reporter Eli Greenblat on Thursday when discussing his, well, rather poor financial results, that he wasn’t thrilled with Premier Daniel Andrews’ handling of COVID-19.
For a change, though, King said he wasn’t at home but working at Myer HQ in Docklands, where management assembled in their masks looking, King said, “like a convention of Hannibal Lecters”.
We’d make some sort of comparison with the famous serial killer and Myer being eaten alive by its online competitors if we didn’t have better taste. So to speak.
As if that wasn’t bad enough, King lamented after recently hearing from friends in Florida, where he still keeps a house in Miami.
“One of my neighbours runs a COVID ward and he goes to me, ‘I’m going out to play golf, I’m going out on my boat, going out for dinner, what is going on with you guys down there?’.”
It turns out that although COVID-19 numbers are higher there, it’s more liveable than Melbourne right now, King said.
UBS lease hopes
Swiss investment bank UBS could put some of the spark back into Sydney’s downtrodden office leasing market with the firm tapping real estate adviser CBRE for counsel on a potential move from the city’s landmark Chifley Tower and Plaza. But old hands say not to get too excited yet as the bank has been a fixture at Chifley for years and its lease runs until the end of 2024.
The company is whispered to be looking for new space in the CBD in a potential blow to the property’s owners, Charter Hall and Singaporean sovereign fund GIC.
A requirement of about 10,000sq m has been bandied about in the market.
But the last time it undertook this exercise, in 2014, UBS decided to stay at Chifley Tower. The bank occupies space including a famed trading room formerly occupied by BT, and other low-rise floors, with some mid-rise space.
The spread-out floors strengthen any case for a shift, although that would require matching what is considered to be the largest trading floor in the southern hemisphere.
Those close to the action say the bank has yet to make up its mind on what its final requirements will look like and how best it will operate in post-coronavirus times.
But wherever it goes, there has already been a changing of the guard at the bank with former chief Matthew Grounds and high-profile bankers including Guy Fowler, Grounds’ co-head at UBS, long gone.
But there remains ongoing speculation about when they will resurface, with talk about a Magellan-backed start-up never really cooling.
Delivering news
Big news for Australia Post on Thursday with revelations in newspapers about boss Christine Holgate threatening to call police unless Pauline Hanson’s One Nation stubby holders were delivered to a Melbourne locked-down public housing tower in July.
Sounds interesting. Not that the Australian Post corporate affairs team, led by Michelle Skehan, agreed, burying the lede so to speak in their daily media clips sent to a couple of thousand of the postal service’s head office workers in Bourke Street and some staff across other sites.
The article was at least on page nine of the pdf file attached to the media clips email, though not among the top three stories of the day, which are included in the body of the email.
So what did Australia Post think was more important news to share with its staff?
Margin Call can reveal the number one article was from David Koch’s Business Builders titled “Mastering customer experience in a contactless world”; number two was from ABC Brisbane about a registered mail item being delivered when Australia Post said it would be delivered — that stuff makes news these days.
Rounding out the top three was an article about Post spruiking its banking services following the closure of Suncorp Bank branches.
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