Myer wary of Solomon Lew’s ‘conflicts’ as it offers him a board seat

After Solomon Lew called for all of Myer’s directors to go, the retailer has offered him a seat on the board, but there is a catch.

Myer acting chairman JoAnne Stephenson says the company needs to work through Solomon Lew’s potential conflicts of interest. Picture: Aaron Francis

Myer is attempting to soothe its biggest shareholder Solomon Lew, after he stepped up his call for all the department store’s directors to resign, by offering him “appropriate representation” on its board.

But there is a catch.

Mr Lew’s Premier Investments – which now owns more than 15 per cent in Myer – also owns 26.3 per cent in household appliance maker Breville, making it one of the biggest suppliers to Myer outside cosmetics.

It is a conflict Myer’s acting chairman JoAnne Stephenson is attempting to wrestle with when pulling up a chair for Mr Lew at the boardroom table.

“The board is open to discussing appropriate board representation of Premier Investments through nomination to the Myer board,” Ms Stephenson said.

“In considering this, we would need to be satisfied around any issues or potential conflict that Premier’s representation on Myer’s board could create and whether it could be addressed through governance protocols or other means.”

It comes as Mr Lew stepped up his war of words with Myer’s board on Tuesday, calling for all directors to resign “immediately”, branding them “missing in action” as Myer battles the worst retail conditions in decades and the fallout of the coronavirus pandemic.

He said he was in a position to agitate for change – after increasing his stake in Myer to 15.77 per cent after buying 41.1 million shares priced at 40c a share – and has rallied other shareholders to support the exodus.

“Premier calls on the failed Myer board to resign immediately. We will work with other shareholders to reconstitute the Myer Board with directors who have expertise across retail, property, logistics and e-commerce so that Myer can reverse its decline,” Mr Lew said.

Myer CEO John King. Picture: Stefan Postles

Ms Stephenson said she would also be contacting other major Myer shareholders, including Geoff Wilson’s eponymous Willson Asset Management, which has a 7.76 per cent stake – as well as Mr Lew.

“I have reached out to Mr Lew and look forward to constructive dialogue. We will also be reaching out to major shareholders.”

Mr Lew has been calling for Myer’s board to be dumped for the past two years. His battle with the department store’s directors got so heated that Mr Lew accused former chairman Garry Hounsell – who resigned ahead of last year’s annual meeting – of being a liar and lawyers were nearly brought in as the two businessmen went to war in front of shareholders and the market.

Ms Stephenson called for an end to the “distraction” and defended her fellow directors and management led by chief executive John King.

“We have the right team and are well positioned to build on this to create value for all shareholders,” she said.

“We are keen to have board matters resolved as soon as possible. The board is focused on ensuring that John King and his management team are able to execute the all-important upcoming peak trading period without distraction.”

Ms Stephenson also said the company has an “articulated strategy” in its Customer First Plan, which was already “delivering positive results”.

“Our balance sheet has been significantly strengthened through tighter inventory management and cash generation. We have improved our range of products, reduced space, significantly grown our online business, all whilst maintaining discipline over costs and capital expenditure.”