Solomon Lew turns the screws on Myer

Solomon Lew is a fierce opponent of Myer's chairman Garry Hounsell.

For Myer this implies a decent turnaround to get the inventory unloaded, picked and onto the cabinets within the lead as much as Christmas. It might be a good tighter deadline to get merchandise prepared for November’s Black Friday and Cyber Monday sale frenzies.

Fewer provides and fewer gadgets in inventory will doubtless imply a success to Myer’s gross sales over the vital buying and selling interval which is able to make it tougher to service its $340 million in debt repayments, with $30 million due this monetary 12 months.

Some suppliers are so involved about Myer’s future they’re reining in provides and requesting it pay up inside seven days of supply. There is speak that some suppliers are dropping their urge for food to take orders and ship in 4 to 5 months because of the outlook for the beleaguered division retailer, notably when suppliers are unable to acquire commerce credit score insurance coverage and its lenders maintain safety over the corporate’s property.

In response to a listing of questions Myer stated it was ramping up its shares in preparation for Christmas “and don’t envisage main points with our deliberate inventory for the upcoming Christmas interval at this stage”.

It stated the delays to the 200 containers was inaccurate however was monitoring the problems related to the Sydney industrial motion. “We have had, and can proceed to have, a gentle circulate of inventory arriving over the approaching weeks to assist what is often the height consumption interval for a retailer as we ramp up for Christmas – and we don’t envisage any main points for this upcoming Christmas interval at this stage.”


The retailer refused to touch upon relationships with particular person suppliers however stated it was in fixed dialogue with them. “And as we’ve performed all through COVID-19, proceed to pay our suppliers on time as per their agreed phrases.”

Whatever the case, Myer is dealing with a number of complications, not the least its shareholder base.

Lew just lately obtained a name from Myer’s second-largest shareholder Wilson Asset Management’s Geoff Wilson in regards to the firm. The fund supervisor’s resolution was to ship a letter to Myer which resulted in a culling of administrators and reducing of director charges, one thing Lew doesn’t imagine is wherever close to sufficient to repair the ailing retailer.

To this finish Premier Investments, which holds 11 per cent of Myer, wrote to Myer requesting its share register to “consider writing to Myer’s members in relation to any resolutions proposed at Myer’s AGM.”

It might be a take a look at of the urge for food of the Myer shareholder base on whether or not it should vote to re-elect Hounsell, who’s up for re-election at this 12 months’s annual common assembly in addition to lob a primary strike towards the corporate; one thing Lew has managed to do earlier than.

Indeed the 2018 second strike towards Myer was equally profitable however pulling off a board spill movement was blocked by Anton Tagliaferro’s Investors Mutual, a lot to Lew’s and lots of different shareholders chagrin.

Interestingly Investors Mutual misplaced persistence with Myer earlier this 12 months and offered up.

To put it into perspective, since Myer listed on the ASX in November 2009 at $4.10 its shares have fallen 95 per cent, destroying billions of {dollars} in shareholder worth as buyers dumped inventory following revenue downgrades, scandals, new administration, board refreshes and new methods.

When Hounsell grew to become chairman, Myer’s shares had been 80¢, with a market capitalisation of greater than $800 million in contrast with 20¢ a share, or market cap of $164 million, on Friday.

Solomon Lew is a fierce opponent of Myer’s chairman Garry Hounsell.Credit:Eddie Jim

This time round all eyes might be on Wilson to see whether or not the fund supervisor sides with an organization that has made an artwork type of disappointing or Lew, who hasn’t put a foot fallacious in terms of managing retail.

His Premier Investments has managed to elevate internet revenue 30 per cent for the 12 months, regardless of the COVID-19 pandemic. It can be shaping up as a promising Christmas for Premier, which owns manufacturers resembling Peter Alexander and Smiggle, as Lew didn’t cancel any summer time provides when the pandemic first hit.

He additionally took a daring stand towards the buying centre giants and refused to pay lease whereas his shops had been shut, one thing that can have a profound influence on the facility shift between buying centres and retailers.

But Myer’s annual common assembly isn’t Lew’s finish recreation.


His subsequent step might be a unprecedented common assembly, more than likely to be referred to as in early 2021, relying on the efficiency of Myer in the course of the Christmas season, which is meant to be essentially the most worthwhile time for retailers.

If Myer’s Christmas is a disappointment, an EGM is all however inevitable, and with it requires a board spill and an overhaul of administration, particularly the chief govt John King, who Lew has beforehand described as presiding over a method that’s in “tatters”.

Right now Christmas appears to be like difficult for Myer. If extra suppliers begin reining in provides and requesting it pays up inside seven days of supply or they lose their urge for food to take orders and ship in 4 to 5 months, issues will begin to unravel.

The upshot is that if one thing isn’t performed to repair the mess, time will run out and 10,000 individuals will lose their jobs, non-bank collectors and shareholders will lose the whole lot.

Most Viewed in Business


Related Post

Leave a Reply

Your email address will not be published. Required fields are marked *