Enough is enough: Lew's latest is his most scathing assessment of Myer yet
Written on the 9 November 2018 by David Simmons
As if the war of words between Solomon Lew and dinosaur-led Myer couldn't get any more exciting, Lew has unleashed yet again with an eight-page assessment of the department store.
Lew's Premier Investments, the largest shareholder in the ailing retail behemoth Myer, is well and truly gearing up to give the Myer board a second strike at its upcoming AGM.
In an eight-page letter, detailing every failure of Myer so far, Lew calls upon shareholders to deliver a second strike against the board.
"Together let's send a clear message to the Myer Board that ENOUGH IS ENOUGH,' screams the opening line of Lew's scathing letter.
"Dear fellow suffering Myer Shareholder,"
"When together we delivered the Board of Myer Holdings Limited a first strike at its 2017 AGM we sent the Board a strong signal. I had hoped that, by now, the Board would have seen the writing on the wall and have resigned in favour of a new independent Board with proven retail experience, a clear direction and a coherent strategy to help support the new Myer management."
"Instead, the value of our investments have decreased by more than 33 per cent over the past 12 months."
Lew's case for spilling the Myer board rests on seven crucial points.
First is his disappointment with the new chairman, Garry Hounsell, who Lew repeatedly calls out for his mismanagement of the company, his lack of retail experience, and his inability to recover the company (the reason he was first brought into the company).
Second, Lew recognises the trajectory Myer is on one which lands it in "the dustbins of history".
"As a fellow shareholder, we share your concerns about this once-great brand," says Premier Investments.
"Furthermore, we are deeply concerned about the future viability of Myer without appropriately skilled retailers on its Board. I urge fellow shareholders to send the Board a clear message at the upcoming AGM this may be the last chance we have to avoid the demise of this once great Australian company."
Third is a point Premier Investments have recently emphasised in its communications with Myer shareholders: "Garry Hounsell has handed over control of Myer to the banks".
This was the key point of Premier Investment's previous communication, via its lawyers; that the company cares more about appeasing the banks than its own shareholders.
Fourth, Premier Investments are concerned about how quiet Myer has become since Hounsell joined as chairman.
Specifically, Lew has raised the problem of Myer's sudden decision to stop providing quarterly trading updates.
"Premier believes that Myer's shares may be trading on an uninformed basis," says Premier Investments.
"These numbers [first quarter results FY19] are critical for shareholders in assessing how to vote at the AGM."
"WHAT DOES MYER HAVE TO HIDE?"
"UNFORTUNATELY GIVEN GARRY HOUNSELL'S TRACK RECORD, SHAREHOLDERS MUST ASSUME THE WORST!"
Fifth, Premier Investments is concerned about the upcoming Christmas trading period, which Lew's group believes will be another disaster for Myer.
"Myer is destined for another failed Christmas/January period," says Premier Investments.
"Garry Hounsell must own Christmas trading."
"The only person who can be held responsible for Myer's performance over this coming Christmas/January period is Gary (sic.) Hounsell."
Sixth is a point Lew has been repeating for a while now; that the Myer board lacks personnel with retail experience.
"Premier knows a thing or two about how to operate in the retail industry, and how to consistently outperform its peers and deliver value for shareholders," says Premier Investments.
"You have to wonder why the Myer Board still continues to refuse to listen to what we have to say. Not only are we aligned with all other shareholders, but we actually know how to deliver results for shareholders."
Premier Investments' seventh point is the call to action: "ENOUGH OF BROKEN PROMISES together let's send a clear message to the Myer board."
"Mr Hounsell talks about "delivery, not promises" but then proceeds to deliver another set of false promises."
"Talk is cheap."
"Mr Hounsell failed to deliver on every promise. He cannot be trusted to steer Myer through these difficult times and certainly cannot be trusted to deliver on his latest set of promises that are doomed to fail."
Myer's upcoming AGM, on Friday 30 November 2018, should be one for the highlight reel if it turns out as Lew has planned.
Shares in Myer are down 1.03 per cent to $0.48 per share at 12.12pm AEDT.
Business News Australia
Author: David Simmons