Solomon Lew has returned to the Myer board after a three decade absence

Solomon Lew was ejected from the old Coles Myer board more than 20 years ago and returns as a Myer director after seven years of hunting down the grand old department store.

Solomon Lew with Myer deputy chair Gary Weiss. Picture: Aaron Francis

It was more than 20 years ago that Solomon Lew was unceremoniously ejected from the Coles Myer board as a director after the former chairman of the conglomerate became the highest profile victim of a vicious and very public shareholder war at the retailer.

Licking his wounds, the billionaire Lew found fortunes elsewhere, building up his war chest at Premier Investments after selling its Coles stake to Wesfarmers at the start of the financial crisis and growing Peter Alexander and Smiggle into highly successful retail chains.

Now, having stalked Myer since 2017 when Premier bought an initial strategic 10.77 per stake in the department store, it has culminated in the “return of the king” with Tuesday’s deal to see Lew become Myer’s largest shareholder and invited to the board as a director.

Over the last seven years he has fought pitched battles with the Myer board, causing bruising annual meetings for the retailer and in once instance forcing out the Myer chairman when he lost Lew’s support and was abandoned by other shareholders. There were also letters sent to shareholders by the Lew camp complaining about Myer’s performance which were as entertaining as they were painful for the department store owner’s board.

Now, Lew has stopped throwing bricks at Myer and has moved inside to the boardroom.

After a three-decade absence when he was chair of Coles Myer, Lew has finally got his hands back on the grande dame of Australian retailing and a department store that stretches back to its founding in 1900.

And while there might be some nostalgia, and sure perhaps some revenge, the real motivation behind the triumphant return to the board seems to be all about the profit that can be made from turning around Myer, which has seen its revenue stagnant for decades and its profits stubbornly low.

Solomon Lew in 2002 when he was a director of the then Coles Myer. Picture: Kelly Barnes

As Lew likes to remind the market, the difference between the performance of Myer and his Premier brands are a world apart, and underline the huge potential of an enlarged Myer group that owns some of Premier’s retail brands.

Myer’s sales in 2024 were $3.266bn for pre-tax earnings of $162.7m. It sales have hardly budged since it floated on the ASX in 2009. In contrast Premier’s retail division had global sales of $1.6bn and earnings of $340m.

“What are you going to be able to bring to Myer?” the typical strident Bank of America analyst David Errington asked Lew at the investor briefing on Tuesday.

“Because it’s clearly an opportunity you’ve identified for a very long time. They’re not doing well. Their wastage is pretty ordinary. Their margins are terrible. Their costs are out of control. Their product range isn’t great.

“So what is it that you can do, and what time frame do you think you’ll be able to bring in significant improvements for the way Myer can run so as its shareholders … can really make a lot of money on this?”

Lew shot back, arguing there were $30m of synergies up for grabs, with possibly more to come. “I think our form in the past has been to underpromise and overdeliver. There is a lot of opportunities. Myer has a solid base of over $3bn worth of sales but have not made a lot of money and not delivered on the bottom line, and whereas if you look at the Premier side we have always delivered well for our shareholders.”

Having stalked his game for seven years, Lew finally nabbed his quarry on Tuesday with a deal to swap Premier Investments’s stake in Myer for a personal stake he will end up with in the retailer.

On the Myer board Lew will be joined by his old comrade in arms from a range of corporate battles in Gary Weiss who is the deputy chairman of Myer and its lead independent director. Weiss is a former director of Premier Investments.