Premier threatens to close 350 shops if landlords do not budge on hire

Solomon Lew has put landlords on notice that they reduce rent, or he walks.

More than 70 per cent of Premier’s shops within the two international locations are on holdover, which means the retailer might shut them with out having to take the pricey motion of breaking leases. Premier is one in every of Australia’s largest retail tenants.

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The firm didn’t pay any hire by means of April when its shops have been closed within the first coronavirus lockdown, and paid a complete of simply $59.2 million in hire throughout the second half of the yr whereas negotiations with landlords have been ongoing.

“Premier Retail’s highly profitable online capability and the flexibility of our property portfolio, combined with the decisions we have taken in response to COVID-19, leave the group best placed to maximise our position in the accelerating retail industry restructure,” chief govt Mark McInnes stated.

The risk comes because the retailer reported a powerful set of full-year numbers in face of the pandemic. Its income declined simply 4.three per cent for the yr to $1.22 billion, regardless of the corporate’s shops being closed for almost two months through the April-May lockdowns, and complete gross sales declining almost 20 per cent for the second half of the yr.

But these declines have been compensated for by the retailer’s on-line gross sales, which jumped almost 50 per cent for the yr to $220.Four million, accounting for 18.1 per cent of complete gross sales. Online gross sales additionally come at a better revenue margin than in-store gross sales.

Solomon Lew has put landlords on discover that they cut back hire, or he walks.Credit:Paul Jeffers

Premier obtained a complete of $68.7 million in wage subsidies throughout the seven international locations through which it operates. A complete of $35.5 million was handed by means of to workers who have been unable to work, leaving the remaining $33.2 million as a direct fillip to the enterprise.

The firm famous that Australia’s JobKeeper wage subsidy scheme meant many informal and part-time staff earned greater than they often would have. It additionally harassed its eligibility for the scheme, noting that between March 11 and May 15, in-store gross sales declined 78.Four per cent.

“Throughout the devastating COVID-19 international well being disaster, our absolute precedence has and continues
to be the protection and wellbeing of our groups and our prospects,” Premier Investments chairman Solomon Lew stated.

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“The board and I are extremely proud of the dedication and professionalism displayed by all of our employees during these unprecedented times of hardship and uncertainty.”

Premier pays shareholders a remaining dividend of 36 cents, a slight decline on final yr, bringing the full-year payout to buyers to a complete of 70 cents per share.

More to come back.

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