Solomon Lew is rewarding shareholders as clothing sales continue to defy the retail crunch

Photo: Smiggle/ Facebook.
  • Premier Investments full year sales $1.18 billion, up 8%.
  • Underlying net profit before tax $160.3 million, up 9.2%.
  • Statutory Net profit after tax fell 20% to $83.64 million.
  • Final dividend 33 cents, up 22%.

Solomon Lew’s clothing group continued to defy the retail crunch, lifting full year group sales 8% to a record $1.18 billion and like-for-like sales 3.3%.

Net profit after tax fell 20% to $83.64 million on the back on brand impairments on labels in the Just Group, including Just Jeans.

But underlying net profit before tax, without one-off expenses, was $160.3 million, up 9.2%.

Again, the standout performers were children’s stationery chain Smiggle, with global sales up 22.7% to $293 million, and sleep clothing brand Peter Alexander up 14.5% to $218.7 million.

Online sales were up 65.3% to $112.5 million. The company’s online sales target of $100 million was delivered two years ahead of its original plan.

Shareholders were rewarded with a final dividend of 33 cents a share, up 22%, taking the full year payout to a fully franked 62 cents, up 17% on last year.

Lew, the chairman of Premier, says the result was another strong one.

“This year’s result was driven by the continued growth of Smiggle and Peter Alexander as well as positive momentum within the apparel brands,” he says.

“Today we are also announcing a multi-channel accelerated growth strategy for Smiggle — targeting both the $450 million in global Smiggle retail sales by FY20 and setting up pathways for significant growth beyond FY20.

“Peter Alexander’s 2020 growth plan targeting $250 million in annual sales by FY20 is also progressing well ahead of expectations.”

Premier Investments, which also has Just Jeans, Portmans, Dotti, Jay Jays and Jacquie-E, is a standout among Australian retailers, growing sales where others struggle.

The company is also the largest single shareholder of department store chain Myer with a 10.8% stake.

The company, dissatisfied with returns, is pushing to have the board of directors replaced.

Premier Retail CEO Mark McInnes says the company will continue to invest in Smiggle and Peter Alexander.

“Our 2011 strategy identified online as an essential and complementary channel for our brands,” he says.

“We have grown this channel from almost zero in FY11 to $112.5 million this year.

“In our apparel brands where we foresaw increased competition, we clarified our market position and invested in product merchants. In Q4-18 these brands delivered sales growth of 8.1%.

“We have also delivered cost efficiencies across all areas of the business. In particular, we sought, and we continue to seek rents in line with centre performance. We have closed and will continue to close unprofitable stores.”

The 2018 results:

Premier Investments

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