- Solomon Lew says the board of directors of Myer is an absolute disgrace.
- His Premier Investments, the largest shareholder in Myer, wants the board replaced.
- Lew says the banks are now in control of Myer after the department store refinanced.
Billionaire retailer Solomon Lew has prepared a report card on Myer, the ailing department store in which his Premier Investment’s is the largest shareholder.
Myer posted an annual loss of $486 million, as sales continue to slow, plus restructuring and store exit costs and impairment of assets.
Announcing the results, John King, the new CEO, said: “Shareholders deserve better”.
Lew says: “The Board of Myer is an absolute disgrace.”
Premier Investments, which has a 10.8% holding in Myer, has been agitating for the board of directors to be replaced.
“And while the Board of Myer, led by Garry Hounsell, has bumbled along and taken their fee cheques, it is Myer shareholders who have suffered,” says Lew.
“Sales are down. Profits are down. Service levels are down. CODB (cost of doing business) has increased. Dividends have ceased.”
Myer has refinanced its loans, lowering net debt by $6 million to $107 million and improving net cash flow. The new debt facility totals $400 million.
“The banks are now firmly in control of Myer — it will be run from now on by its bankers,” says Lew.
“The banks have taken a security charge in front of staff, suppliers, landlords and other creditors. This will further erode Myer’s goodwill with its partners. And interest costs are way up on the new loan facility, which will exacerbate the losses.
Here’s how Lew sees the last year:
“Premier has been able to predict these events because of its deep understanding of the retail market. This is why Myer needs directors with retail experience on its Board,” says Lew.