Another assault on the Myer board and management from the retailer’s biggest shareholder, Solomon Lew and his Premier Investments. His latest attack came a day before the retailer holds an investor day with what is expected to be a trading update and details of its ’New Myer” current strategy.
Billionaire rag trader Solomon Lew has ratcheted up the pressure on Myer, claiming it may have failed to keep the market informed about its trading performance and raising the prospect of legal action.
Mr Lew’s Premier Investments said yesterday said it was concerned the market was trading Myer shares “on an uninformed basis” because of deficient disclosure.
Premier said any update Myer planned to release on Wednesday should be announced as soon as it became available to the company’s management and board.
"Until that information is released, Premier believes that the market has been, and is, trading on an uninformed basis," Premier said in a statement, which reiterated its call for Myer to release its first-quarter sales figures.
Premier is Myer’s biggest shareholder with a 10.8% stake and has been agitating for positions on Myer’s board. Premier’s stake cost it $1.14 a share and Lew is facing a big loss with Myer shares around down more than 3% yesterday at 76.5 cents.
And Premier’s comments in this area in yesterday’s statement was telling.
"Premier Investments believes it was misled into outlaying more than $100 million to buy 10.8 per cent of Myer, and is being denied its request for board seats by directors who collectively own less than 0.1 per cent of the company and whose tenure has been marked by falling sales, profit, and market value," Premier said.
“The situation is untenable,” it added.
Premier said it was “carefully considering its legal and other options in order to bring about urgently needed change to ensure that Myer shares are trading in an informed market”.
But there is little it can do and many companies prepare and release trading updates timed for investor days – Wesfarmers is one where it issues an update on the general thrust of its performance and targets for the year to the next June, as does Telstra.
But no one forced Premier to buy Myer shares in late May – it could have waited until after the por results for 2016-17 and then bought at a cheaper price.
The latest attack came only six days after the company launched similar criticism in this statement (https://www.premierinvestments.com.au/wp-content/uploads/2017/10/2017.10.24-PMV-re-Myer-AGM.pdf):
"Premier will be attending the Annual General Meeting of Myer and voicing these and many other concerns. We take no pleasure in doing so – in fact we are very saddened to see the state of this once great Australian company – but we are no longer prepared to put up with being shut out by the Board.
"Our greatest criticism of Myer is the lack of mass-merchandise retail experience on the Board. How can the directors possibly advise management and keep them on their toes? How can they add any value to discussions about strategy, pricing, ranging, distribution, property, store locations, customer service, supplier relationships and all of the other critical elements of successful retailers?
"As Myer shareholders we deserve better. Myer customers deserve better. The Australian fashion industry deserves better – it needs Myer to be a strong competitor to the global brands that are increasingly coming to our shores,” the company’s statement and letter from Mr Lew said.
