Retail rush just the ticket for CEO Richard Murray as Premier Investments gears up for the sales

Retail is back and with a whole new set of post-Covid challenges for the country’s top retail managers, according to Richard Murray, one of Australia’s top retailers.

Richard Murray, who is 12 weeks into the job as Premier Investments’ CEO, talks of a rush for new party frocks and pencil cases, and his power partnership with Solomon Lew.

Retail is back and with a whole new set of post-Covid challenges for the country’s top retail managers.

During the frenzy of Black Friday, Richard Murray, one of Australia’s top retailers, ekes out a moment for The Weekend Australian.

Twelve weeks into the job as Premier Investments’ CEO, he talks of a rush for new party frocks and pencil cases, the overdrive at distribution centres, his power partnership with Solomon Lew, and why the Victorian government could have handled the pandemic one helluva lot better.

Despite shutdowns, Premier has been a retailing success story with its brands Smiggle, Peter Alexander, Just Jeans, Portmans, Jacqui-E and Dotti.

“They are like all your children you treat them equally,” Murray said of bumper sale days but admitted that the Black Friday-Cyber Monday weekend and the Boxing Day sales were the two most critical weeks.

Black Friday started life online but this year shoppers are pouring back into centres. Groaning supply chains have thrown uncertainty at Christmas deliveries and added to the allure good old brick and mortar buys. And then there is the little black dress that women want for the party season now, now. “They are out of their work-from-home gear and looking for any excuse to get dressed up which is fantastic for our business.”

Murray says the financial strength of Premier’s business allowed the group to go early on stock calls and control its supply chain.

“When half your stores are closed you need to keep the faith but we would rather have the stock and trade it that not have the stock. We injected a lot of extra lead times into our orders for Christmas months ago, which is the advantage of having a deep management team and a pretty engaged board and chairman.”

Supply chain management is front and centre for Murray who ran JB Hi-Fi for seven years. That has meant urgent top-to-top meetings across business. Last week was logistics week with Global Express chief Christine Holgate and Aussie Post’s Paul Graham.

“It was Christine and Paul in the one day,” he said.

“It’s important as a new leader to engage with your key partners. Are delivery times longer than we would like? Yes, but it’s certainly not for lack of trying and particularly in Victoria.”

The worst logistics issues are what he calls Melbourne to Melbourne. “It’s within Victoria, which is ironic because our distribution centre is in Victoria. It was Covid cases in distributions centres that caused many logistics providers to have capacity constraints.”

Murray has a blunt message for the Victorian government which he says was not helpful to logistics providers, an essential service.

“While it might have been a Team Australia moment, Team NSW did a great job of balancing all the needs and the complexity. As a Victorian business and a Victorian support office business, I wish we could do that better in Victoria. Ultimately that goes to jobs. And flexibility would have created a better safer environment.”

Premier owns its Victorian distribution centre which allows management to flex up and down and control its own destiny. As the business grows, DC 2.0 is part of a three to five year vision.

Property for storage and logistics is prime space post-Covid and Premier is mulling over the next location. “For me, the jury is still out on a second DC in Victoria, a larger single DC or a second DC interstate. With one DC, there is the risk of being single point sensitive but it’s more efficient.”

As a duo, Premier chairman Solomon Lew and his former CEO Mark McInnes were lauded as the top retailing partnership in Australia. In Murray, Lew is planning to repeat that performance.

“I’ve got one of the best coaches in the business,” said Murray. “Have I been surprised at the similarities? Yes: promotional plans, getting the right stock in the right place, labour rosters, all the detail of retail, it reinforces in our mind that those basics are critical. Obviously in my old shop was a branded business. We sold other brands so they broadly took care of logistics. The advantage for Premier is we make our own bed.”

Murray says he had a strong partnership with his former chair at JB Hi-Fi, but calls were weekly, not daily. “There are a lot of things that Sol and I want to achieve over the next decade and so that more regular engagement is going to mean that we go faster.”

Managing landlords is also a bigger part of Murray’s CEO role. “I share the view that there has been structural change in the retail industry,” he said.

“I would argue many of our landlords are still coming to grips with the impact of that structural change. And Sol and Mark and the team have worked very hard over the last couple of years to both protect the business and work with landlords.”

Premier has more than 1000 stores, 75 per cent of which are either in holdover or have leases with less than 12 months to run. But Murray wants to invest and refresh stores which he says landlords support because it attracts other tenants.

“We are happy to take tenure when we get the right deal.” He sounds like a chip off the old block.

As shoppers return, Murray said generally customer behaviour outside Victoria had been better than anticipated and greatly appreciated by the company. But again he sheets part of the problem in Victoria back to the state government. There was a lack of consultation with retailers who deal with thousands of staff.

“It is non-negotiable that we need to do the right thing but the way Victorian directives played out was unhelpful. It just happened at 10pm on a Thursday night and by Friday morning every retailer had to figure it out.”

After 18 months of lockdowns Premier is consolidating. Murray is reflecting on growth ambitions alongside seven brands, store refreshes, online, DCs and the OXFAM push for more transparency in ethical sourcing of apparel. As for the Myer investment? “That’s Sol’s department at the moment,” said Murray.

The standout success has been Peter Alexander and Smiggle and stores are stuffed for Christmas. For the pyjama experts the huge growth is domestic and Murray says he is blown away by product innovation and designs rotated through shops in two week cycles. A set of mystery pyjamas from the family will be under the tree.

Smiggle’s story is already global. The UK business has been battered by headwinds of Brexit and Covid and Murray said in Australia it was easy to underappreciate how much more complex the challenges have been.

Smiggle is now roaring forward with a good dose of nostalgia. “We are seeing grandparents coming in with super orders of product. The kids have been on laptops doing their schooling for 18 months and they want to get them back to basics and think Smiggle really stands for that,” said Murray.