Billionaire retailer Solomon Lew, who controls 10.77% of Myer through his company Premier Investments, has launched an attack on the department store chain’s board of directors and a company which he says has lost its way.
In a letter to shareholders, he says he will use the November AGM to express “complete disappointment and frustration” with the Myer Board of directors.
Lew says he has no current intention of making a takeover offer for Myer but his company will vote at the AGM against the appointment of all directors.
He tried in May to get a meeting with the chair of the Australian retail icon, Paul McClintock, but was told he would have to wait six months.
“That the chairman of the largest shareholder in the company should have to wait six months to speak to the board is simply arrogant,” says Lew.
“We are no longer prepared to put up with being shut out by the board.”
This month Lew met with Garry Hounsell, the chairman-elect of Myer, seeking the appointment of two independent directors from Premier Investments and a third non-executive director.
This was rejected by the Myer board.
The current chair, McClintock, said: “Today’s announcement from Premier is disappointing, but unsurprising. We have attempted to engage in constructive dialogue with Premier for many months, but regrettably this has not been possible.
“The Myer board continues to support the New Myer Strategy and recommends that shareholders vote in favour of all resolutions, including the election of three directors put forward by the board at the forthcoming AGM: Garry Hounsell, JoAnne Stephenson and Julie Ann Morrison.”
However, Lew said Myer had been a well-run business.
“Sadly, those times are long gone. In my view, and based on my personal experience in many Myer stores, Myer has lost its way. It has too much product that people simply don’t want to buy,” he says.
“Its stores — particularly those in suburban and regional areas — are disorderly, and it has not invested in frontline customer service.
“Too many of its talented retailers have left the business, and I believe it is now being run by consultants who have very little experience of running a retail business.”
Lew says he’s shocked by clearance floors which Myer has now installed in eight locations.
“They are one of the worst experiences I have had in more than 50 years in retail,” he says.
Lew says the New Myer strategy hasn’t made progress against any of its objectives after two years.
Last month Myer posted a 1.4% drop in sales to $3.2 billion, down 0.2% on a comparable store basis, for the full year.
Net profit after tax was down 1.9% to $67.9 million.
In contrast, total sales for Premier were up 5.7% to $1.1 billion, with like-for-like sales 1.1% higher, for the latest full year.
Children’s stationery chain Smiggle was again the standout performer, with record sales of $238.9 million, up 28.81% over the 12 months.
Premier Investments, which also owns Just Jeans, Portmans and Peter Alexander, is run by former DJs CEO Mark McInnes.