SOLOMON LEW CALLS FOR TOTAL OVERHAUL OF MYER BOARD AS BATTLE GETS PERSONAL
Written on the 24 October 2017 by Ben Hall
RETAIL billionaire Solomon Lew has declared war on the board of Myer with a personal letter released to the ASX which lamented the department store chain's 'demise' and called on shareholders to vote against the reappointment of all of its directors at next month's AGM.
Lew, who has a 10.77 per cent stake in Myer through his retail group Premier Investments, also took aim at Myer's incoming chairman Garry Hounsell for suggesting that a meeting between the two over the future of the company had not taken place.
As an indication of the personal bitterness that has emerged between the two, Lew says he met with Hounsell on October 6 and during that meeting asked for two Premier directors to be appointed to the Myer board.
"This request was taken to the Myer board by Mr Hounsell and rejected. Mr Hounsell then inferred to the media that he was yet to meet with Mr Lew, and publicly backed the "New Myer" strategy against all of the evidence that it is not working,'' the Premier Investments statement says.
Lew (pictured right with CEO Mark McInnes) penned a personal letter to shareholders which accompanied the Premier Investments statement and was critical of Myer's performance, even though he believed it was an Australian icon.
"At its height, it was a well-run business that understood what its customers wanted to buy, and delivered it with great service," Lew says.
"Sadly, those times are long gone.
"Myer is an iconic and important Australian business which, for the sake of its shareholders, employees and customers, must not be allowed to suffer any further decline."
Lew goes on to say that Myer has "lost its way" and called for the board to be replaced because it lacked mass-merchandise retail experience.
"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.
"Too many of its talented retailers have left the business and I believe it is now being run by consultants who have very little experience of running a retail business.
"I have been shocked by the 'clearance floors' which Myer now has permanently installed in eight locations.
"I have visited many of them and they are one of the worst experiences I have had in more than 50 years in retail."
Lew was also critical of Myer's investment decisions. in July, the company announced it will take a $45.6 million hit after writing off the value of its 20 per cent stake in Topshop's Australian franchise and impairing the value of its struggling sass & bide brand.
Myer released its worst profit result since 2009 in September when its statutory net profit dropped 80 per cent to $11.9 million in the 2017 financial year due to the writedowns and a fall in revenue, which also prompted the announcement of store closures.
Business News Australia
Author: Ben Hall