Bad luck for Solomon Lew, or decision time for an assault on Myer (MYR)?
Shares in department store chain Myer fell 9% yesterday after a gloomy research report from an investment house analyst. Mr Lew launched a raid on Myer in March and built an 81 million share, near 11% stake at $1.15 a share.
He is yet to detail his plans for the investment which is held through his 42% owned Premier Investments (PMV).
Myer shares dropped to $1 by lunchtime after a research note from Credit Suisse analyst Grant Saligari reached the market. That’s where they ended the day on turnover of more than 19 million shares, the highest daly volumes since the end of March when Mr Lew staged his raid.
In his report note to clients, Mr Saligari said the arrival of US groups, TK Maxx and Amazon would create significant problems for Myer.
In his note, Mr Saligari listed the issues as including: "the entry of TK Maxx and Amazon, Myer’s overly large store portfolio and, in the near term, a deteriorating spending environment".
It is likely to be ‘all too much for Myer,’ he said.
Myer is due to release its third quarter sales results on Thursday.
He noted that Myer takes up to seven days for a standard online delivery and up to five days for click and collect.
Mr Saligari said the main variables that could improve things for Myer would be an uptick in consumer spending or a move by Solomon Lew’s Premier Investments to acquire the business.
The note adds to the rising level of gloom about retailing with weak results or updates from the likes of The Reject Shop, Super retail Group, OrtonGroup and department store chains, Target and Big W.
TK Maxx has landed in Australia with 35 stores converted from Trade Secret outlets while Amazon recently formally confirmed its plans to tackle Australia.
