Solomon Lew defies the retail slump with pyjamas and pencils

Image: Premier Retail report.

Solomon Lew’s Premier Investments has shrugged off the retail slump, posting record first half sales, helped by strong growth in the bright and brash children’s stationery chain Smiggle.

Statutory profit after tax for the first half was flat at $71.87 million, up just 0.46%, but underlying net profit before tax was a record $100.6 million, up 9.7%.

Sales were a record $588.6 million, up 7.1%. Like-for-like sales were up 2.1%.

“These results were achieved in a half that saw several Australian discretionary retailers go out of business whilst others have reported significant decline in earnings,” says chairman Solomon Lew.

The company is a stand out among Australian retailers, growing sales where others struggle.

Last month fashion labels Marcs and David Lawrence went in to voluntary administration, citing deteriorating sales, general market conditions and poor cash flow.

They were the latest in a string of players in the retail sector, under pressure from online trading and emerging competitors, going into administration, including Payless Shoes, Pumkin Patch, Howards Storage World and Dick Smith stores, which closed last year.

However, at Premier Investments, Smiggle sales for the six month to January 28 were up 26.4% to $134.7 million.

Almost 60% of sales were from outside of Australia. The brand has increased sales 81% over two years. This chart shows the growth story:

Source: Premier Investments

The brand has opened more than one store a week for the past 12 months.

At the end of the half, Smiggle had 272 stores across Australia, New Zealand, Singapore, England, Scotland, Wales, Malaysia and Hong Kong.

Smiggle will enter the Eurozone this half by opening its first store in Ireland.

At sleepwear brand Peter Alexander, sales up 13.8% to $99.4 million.

Online sales were up 48% and on track to hit $100 million in annual sales by 2020.

The company also runs Just Jeans, Portmans, Dotti, Jay Jays and Jacquie-E.

Premier CEO Mark McInnes says the company is focused on expanding Smiggle globally, growing Peter Alexander significantly and delivering a world class online experience.

The company declared a full franked dividend of 26 cents a share, a 13% rise.

The first half numbers in detail:

Source: Premier Retail