- Billionaire Solomon Lew launched another attack on the “dismal performance” of the Myer board of directors.
- He says the board appears to be forcing new CEO John King to backtrack on his promise to close Myer clearance floors.
- Lew has called on the board to back its CEO and close all of the clearance stores now.
Premier Investments Ltd, the biggest shareholder in retailer Myer, today launched another salvo at a “dismal performance” from the board of directors of the department store chain.
Solomon Lew’s Premier is alarmed at reports that the recent decision by new Myer CEO, John King, to close Myer clearance floors has been reduced to a trial closure of only three stores for three weeks.
“Premier believes this development is proof that Mr King is battling against his own board in making the necessary decisions to improve Myer’s performance,” the company says.
Earlier this month Premier Investments, which has a 10.8% holding in Myer, asked for a copy of Myer’s register of shareholders as it prepares for the annual general meeting of shareholders later this year.
Premier, the owner of Smiggle, Just Jeans, Portmans and Peter Alexander, has been agitating for the board to be replaced.
Myer last month posted an annual loss of $486 million. King, who was appointed CEO in June, then said: “Shareholders deserve better.”
At Myer’s full year results announcement, King was asked if he planned to close clearance floors.
He replied: “Yes. They are going to go. Yes absolutely, I hate them. They are going to go through 2019.”
A Myer spokesperson said: “All clearance formats will close through CY19. Nothing has changed from what we advised at the Full Year results.”
However, Premier says it now appears, based on a Myer memo to its suppliers, that King is being forced to trial the closure of three floors rather than just getting on with a plan to close all of them.
“Is Mr King being forced by his Board to backtrack on his commitment to close all of the clearance floors?” asks Premier.
“What is the point of this trial if the CEO is already publicly committed to closing all of the clearance floors by the end of 2019?
“What can be gained by trialling a process of switching the lights off on three stores for three weeks in any case?
“Why should the clearance stock be left in a closed, dark space for three weeks where it cannot possibly be sold? Surely the stock should be written off.”
Premier says Myer investors who support King and want him to succeed in turning Myer around should note that the CEO needs a board he can work with, not against.
“The awful clearance floors are part of (chairman) Garry Hounsell’s green shoots for Myer and it appears he doesn’t want to allow Mr King to close them,” says Lew, the chairman of Premier.
“Green shoots don’t grow in the dark, Mr Hounsell, but mould does. Don’t just switch off the lights for three weeks at three stores — back your CEO and close all of the clearance stores now.”