Solomon Lew says Myer is creating ‘carnage’ for shareholders and is pressing again for the board’s removal

Premier Investments chair Solomon Lew. (Photo by Mark Dadswell/Getty Images)

Myer’s biggest shareholder, Solomon Lew’s Premier Investments, has described the retailer’s latest results as more “carnage” for shareholders.

The department store chain reported a loss of $476.22 million for the six months to January, driven largely by a $515 million impairment, with sales down 3.6% to $1.72 billion. Dividends are cancelled.

Lew’s Premier Investments is the largest single shareholder in Myer with a 10.8% stake. It says today’s result is further evidence the Myer Board should be removed and replaced as soon as possible if the company has any hope of surviving.

Garry Hounsell, who is Myer Executive Chairman while the company seeks a new CEO, highlighted poor execution of the retailer’s strategy, including what he called a “failure” to respond to the heightened competitive environment prior to Christmas.

He says execution of strategic initiatives “could have been better managed”.

In a statement, Premier Investments said: “Meanwhile, Mr Hounsell, who is not qualified for the role, is paying himself $1 million per annum to be Executive Chairman amid the carnage he and the Board are creating for shareholders.”

The company pointed to the apparent abandonment of the new performance targets for management that were only re-set at Myer’s Strategy Day in November 2017.

“If the Board is not holding management to account, what are they doing? They have clearly surrendered their responsibility to shareholders,” says Premier.

Premier also noted the end of dividends.

“They will not return under this Board. Any shareholder who wants to ever be paid a Myer dividend again must help us remove this Board,” says Premier.

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

Premier Investments this month posted a 9.36% rise in net profit after tax to a record $78.6 million for the half year on the back of strong growth in children’s stationery chain Smiggles and pyjamas label Peter Alexander.