Solomon Lew: Myer has lost its way

Plan to vote against incoming directors.

Premier Investments, Myer’s largest shareholder with a 10.77% stake, announced its intention to vote against the appointment of all directors proposed in Myer’s notice of meeting, including incoming chairman Garry Hounsell, and will be urging its fellow shareholders to do the same.

Premier may also call an Extraordinary General Meeting (EGM) to allow shareholders to vote on its nominees for the Myer board, which include two Premier independent directors and a further non-executive director (non-Premier).

In response to Premier’s request, outgoing Myer chairman, Paul McClintock said the Myer Board rejected the proposal due to the potential conflict of interest given Premier and its associates’ status as one of the retailer’s largest suppliers and competitors.

Myer CEO, Richard Umbers

In a letter to Myer shareholders, Premier chairman, Solomon Lew expressed “complete disappointment and frustration” with the Board of directors.

“In my view, and based on my personal experience in many Myer stores, Myer has lost its way. It has too much product that people simply don’t want to buy. Its stores – particularly those in suburban and regional areas – are disorderly, and it has not invested in frontline customer service.”

Of particular mention were the clearance floors which Myer has now permanently installed in eight locations, as well as poor investments in TopShop and Sass and Bide, which has resulted in writing off tens of millions of dollars of shareholder funds.

“Premier will be attending the Annual General Meeting (AGM) 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?”

Premier will be monitoring the Myer Strategy Day on November 1 and calls upon Myer to announce its current sales and profits for the Q1 period “so the market is fully informed when assessing the strategy”.

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