Solomon Lew in war of words with Labor over JobKeeper

Billionaire Solomon Lew and Labor’s Andrew Leigh get personal as his empire keeps wage subsidies while profits surge.

Retail billionaire Solomon Lew’s Premier Investments has almost doubled its profit. Picture: Aaron Francis

Solomon Lew has savaged Labor following its rebuke over the decision of his Premier Investments not to repay JobKeeper funds, which included a bruising charge that billionaires like Mr Lew were relying on corporate welfare to “buy another yacht”.

The row came as Mr Lew also forecast a bumper winter in Australia for his fashion chains, helped by the celebration this year of Mother’s Day and Easter. Both trading days were shut down by the first nationwide COVID-19 in 2020, which Premier Investments said cost its business $131m in lost sales just in May.

Amid the carnage of the pandemic Premier Investments took in more than $60m in JobKeeper wages subsidies in fiscal 2020. For the January half of 2021 it received $15.6m, which it still holds and is keeping in reserve in case the nation is tipped into another series of lockdowns.

However, within hours of Premier Investments releasing its interim profit results on Wednesday — which showed profit almost doubling to $188.17m and like-for-like store sales growth of almost 20 per cent — the Opposition’s shadow assistant treasurer Andrew Leigh demanded Mr Lew’s fashion empire return its JobKeeper funds and added the gibe about billionaires and yachts.

“Premier Investments has seen a spectacular increase in their profits, thanks to millions of dollars of taxpayer support. They paid their CEO a $2.5m bonus (more than many Australians will earn in a lifetime). JobKeeper was never meant to help billionaires like Solomon Lew buy their next yacht. Premier Investments don’t need corporate welfare. They should pay back every cent,” Dr Leigh said in a statement.

Mr Lew, who isn’t known to run from a fight and is happy also to start them, reminded the Labor Party it fully endorsed JobKeeper when it was launched last year and voted for the legislation, with its campaign led by Dr Leigh to name and shame companies that have posted strong profits but not returned JobKeeper wages subsidies hypocritical.

Mr Lew told The Australian Dr Leigh should answer a number of questions about his behaviour and choices through the COVID-19 pandemic, and when he was read the statement from Dr Leigh commented: “Does he want to say that outside of Parliament?”

“Well, I tell you, that he should be asked a question about did he take a pay cut?,” Mr Lew told The Australian.

“Whatever we have paid we have paid under contract because people have earned it, and I will stand up every day of the week for that.

“It is ridiculous,” Mr Lew said about Dr Leigh’s statement on JobKeeper and billionaires buying yachts.

Mr Lew said the ALP voted for the JobKeeper legislation when it was tabled in Parliament and endorsed it when it was launched.

“The government stimulus programs have created massive employment, the government saved 3.6 million jobs, they kept the people in touch with their business.

“Australia is a standout globally and full credit must go to the government for supporting business who in turn invested and kept Australians in their jobs — and that is what JobKeeper is about.”

There has been some public criticism of companies that have recorded strong uplift in sales, profits and dividends to shareholders and which also took in wages subsidies such as JobKeeper, with demands for these funds to be paid back. Harvey Norman received tens of millions of dollars in JobKeeper subsidies as its profits more than doubled and has declined to pay back the money, while companies such as Domino’s Pizza, Nick Scali and Super Retail have returned JobKeeper funds.

It comes as Premier Investments, whose retail businesses span a stable of popular fashion chains such as Portmans, Just Jeans, Dotti, Peter Alexander and stationery retailer Smiggle, is thriving from a shopping boom — particularly online — that has generated record sales and earnings for the group.

Mr Lew and his outgoing Premier Investments chief executive Mark McInnes are now doubling down on their focus and resourcing of its online shopping platforms as it positions itself to win from the explosion in online shopping triggered by COVID-19 and which is not expected to lessen even as the pandemic recedes.

On Wednesday Premier Investments posted an 88.91 per cent leap in half-year profit to $188.172m as revenue from its retail operations and other investments rose 8.44 per cent to $795.785m.

Premier Retail, which holds is various retail businesses, recorded a 7.2 per cent lift in global sales to $784.6m with like-for-like sales across its stores network up 18.2 per cent. Its retail operations generated earnings of $237.8m, up 88.5 per cent.

Among its stable of brands, Peter Alexander had record sales of $207.7m, up $62.9m or 43.4 per cent on 2020.

Premier Retail also booked record online sales of $156.7m, up 61.3 per cent.

The fashion and apparel company also has sizeable equity and property investments including a 26.27 per cent stake in kitchenware and appliances business Breville with its share of net profit from Breville for the half amounting to $16.854m, up from $13.9m in the previous corresponding period.

Premier Investments declared a flat interim dividend of 34c per share, payable to shareholders on July 29.

Smiggle and Peter Alexander again were the key driver of earnings, while its women’s fashion and apparel brands Dotti, Portmans and Jacqui E suffered a drop in revenue. Among its brands, sales at Peter Alexander were up 43.4 per cent to $207.7m, at Just Jeans sales rose 20 per cent to $161.3m.

Dotti sales fell 1.8 per cent to $56.4m and Portmans sales were also down 1.8 per cent to $64.3m. Sales for Jacqui E fell 10.3 per cent to $35.9m.

Labor treasury spokesman Andrew Leigh

Peter Alexander sales were one of the stars in the Premier Investments stable.