Solomon Lew says he can see why Myer tried to hide its sale numbers

Myer Fashions on the Field Victorian Finals winner Holly Stearnes (C) poses with second runner up Montelle Mondello and third runner up Brittney Tamou at Flemington Racecourse in Melbourne. Daniel Pockett/Getty Images for the VRC
  • Myer has confirmed leaked quarterly sales numbers showing a 4.8% drop in the first quarter.
  • Solomon Lew’s Premier Investments Limited says the numbers, forced by the ASX to be disclosed publicly, are disastrous.
  • He says even Father Christmas couldn’t turn around such a result.

Billionaire retail veteran Solomon Lew says even Father Christmas couldn’t turn around Myer’s latest sales results.

Myer, which has stopped issuing quarterly trading updates, has confirmed first quarter sales fell 4.8% compared to the same three months last year and down 4.3% on a comparable store basis.

“A sales drop of 4.8% (nearly 1 in every 20 dollars of sales disappearing) is something that even Father Christmas can’t turn around,” says Lew.

Myer shares were down almost 9% today to close at $0.41.

Lew’s company Premier Investments, the largest shareholder with 10.8% of Myer, noted that department store had been forced by the ASX to make a disclosure of its “disastrous” first quarter sales results following a report in the Australian Financial Review.

“Premier has consistently called for Myer to release its first quarter sales figures so that shareholders can be fully informed as they cast their votes for the forthcoming, all-important AGM,” Premier said in a statement.

“Given the parlous nature of Myers’ sales, Premier can now see why the Myer Board had been so eager to hide them.”

Myer’s CEO, John King, says: “I want to be clear, our focus is on profitability and we will not chase unprofitable sales just to hit our top line sales number.”

Myer Chairman Garry Hounsell said: “Myer has solid cash flows and has reduced net debt by $7 million compared to the previous corresponding quarter. Myer is well aware of its continuous disclosure obligations and confirms it is in compliance with them.”

Myer says trading during the second quarter represents the most important contribution to Myer’s full year profitability.

However, Lew says he’s heard before claims by the Myer Board about the importance of Christmas trading.

“Last year Mr Hounsell said the same things at the same time, then downgraded Myer’s guidance during December, and the following February due to a terrible Christmas performance.

“The trend is not Mr Hounsell’s friend.

“The failed Myer Board must go. Premier again calls on all Myer shareholders to join forces to vote for a second strike at the AGM, and then vote for a spill of the entire Board.

“The numbers don’t lie, no matter how hard the Myer Board tries to hide them. Premier will have more to say on these matters in coming days.”

In September, Myer posted a 52% fall in underlying annual net profit to $32.47 million as the department’s store’s strategy to resurrect growth crumbled. Revenue fell 3% to $3.1 billion and sales were down 2.7% on a comparable store basis.

The company has been cutting costs, ditching managers and executives, negotiating rent reductions and renegotiating its loan deal with banks.