Lew lays down Myer plans

myerPremier Investments chairman Solomon Lew has laid down his plan for the turnaround of Myer, detailing a seven point plan to shareholders ahead of the department store retailer’s AGM.

In a letter, the retail veteran also criticised Myer’s chairman-elect Garry Hounsell for “his now-infamous letter” to shareholders which claimed that Premier had not named the two Premier independent directors and one external independent director it put forward join the Myer board to assist in turning the company around.

Lew claimed each nominee was discussed in detail at a meeting with Hounsell, with Premier nominating former Myer managing director Terry McCartney, former UBS MD Tim Antonie and current chief investment officer of Abacus Property Group Steven Sewell to address specific aspects identified by the veteran as critical to Myer’s turnaround.

McCartney is an independent, non-executive director of Premier, previously serving as MD of Myer Grace Bros where he “led year-on-year growth in profitability of Australia’s largest department store, the culmination of which was Myer delivering in FY2000 $3.67 billion in revenue, and $148 million in profit.”

Antonie “was put forward to assist the Myer board on its balance sheet issues, and to address its poor track record of value-destructive acquisitions such as Top Shop and Sass and Bide; while Sewell, formerly CEO of Federation Centres before the $12 billion merger of Federation Centres and Novion to form Vicinity Centres, was nominated because “there is no-one better able to assist the Myer board in dealing with its obvious property and lease liability issues than Mr Sewell.”

“Myer’s long-dated leases in non-performing centres are one of its key issues, and it currently lacks the experience and ability to address this issue at board level,” Lew said.

“Myer is simply waiting for leases to expire, but it needs a property management expert at board level to help it expedite a solution for the benefit of Myer shareholders.”

Premier also said it had named two directors to represent it on the Myer board, equalling a total of 20 per cent of a ten-member board, and named and proposed a further independent director not related to Premier in any way, in response to “the falsehood that Premier has requested 43 per cent of the seats on the Myer board.”

Seven point plan

Premier outlined its plans for Myer’s turnaround, beginning with the appointment of directors with retail experience to “return the business to sales and profit growth” and “address its poor acquisition track record, and stop it from repeating the mistakes of Top Shop and Sass and Bide, where clearly there was deficient due diligence and strategic thinking involved.”

The plan includes a focus on returning service levels ‘after Myer stripped back the hours of experienced staff on the shop floor’ and the closure of “the disastrous clearance floors,” dubbed “a blight on the Myer name.”

“Myer cannot get out of its troubles by becoming a second-hand store. The stock in the clearance floors should be written off as some of it is approximately 3 years old.”

Lew also hit out at “the loss of talented retail executives” and said to “get rid of the consultants.”

“Consultants do not know retail, they know consulting. Myer needs retailers who know the business from the shop floor up, as well as experienced, solutions-focussed businesspeople who can tackle their key issues.”

“Hounsell might sneer at Premier’s so-called “rag trading mentality”, but the object of retail is to trade, not to stockpile old merchandise that no-one wants for years and then dump it on the market via “clearance floors”.

“Experienced retailers know what customers want because they listen to customers and deliver on their needs. They then know how to source that product from the leading manufacturers and how to range it profitably. If that’s “rag trading”, then so be it.”

Premier added the closure of non-performing locations should be accelerated but said “Myer simply  lacks the nous at board level to find solutions with its landlords.”

Myer said the statements from Premier Investments “demonstrates their agenda of disrupting Myer at a critical time of year when our focus is on serving our customers through the busy trading period, and delivering on our new Myer strategy.”

“Nothing in today’s statement changes the fact that Premier Investments is one of Myer’s biggest competitors and suppliers. No one would expect Woolies to invite Coles onto its board,” said a spokesperson for the department store retailer.

“Myer directors urge shareholders to vote for all resolutions to ensure an independent, conflict free, Myer.”

Myer’s AGM will be held on November 24.

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Comments

5 comments

  1. Peter posted on November 9, 2017

    Solomon Lew is absolutely correct, get back to basics and then take it from there, you need the retail people at board level to be able to give the public what they want, when they need it and stay a step ahead of the competition. Also Solomon Lew would have a vested interest as a supplier and shareholder as well. The Myer board has been floundering for years, I know who my confidence is with. reply

  2. PD posted on November 9, 2017

    I am not a Myer shareholder, however I am a customer. The technicalities of bringing the business back on track is something that needs to be done by grass roots retailers. As a customer of Myer since the Grace Brothers days, I don't go into Myer any more, I have had many episodes whereby I have gone in and chosen products and then walked around the floor trying to find someone to take my money. It is ridiculous. Believe me, David Jones isn't very far behind. Why do they spend so much money to entice me into the store and then make it hard for me to shop? They are both sowing the seeds of their own destiny, ignore the customer at your peril. reply

    • Sonja posted on November 11, 2017

      I totally agree with this. Many times I go into Myer and its hard to find anywhere to purchase the item. So many counters are left unattended and you walk around trying to find somewhere to purchase it from. You cannot ever get anyone to help you or ask a question . The most service you get is from someone in the cosmetics counter as they seem the most staffed. I also find the stores so cluttered that you get overwhelmed and you end up not buying anything because theres too much. You have to get back to the basics. Customer service, staff that actually have knowledge of their departments and staff to serve you on the registers in that department. Most people in top executive positions in retail probably have never worked a day in their life on the shop floor. Make all big bosses do at least 3 months on the shop floor so they actually can see where the problems are. reply

  3. Gerald Simenson posted on November 10, 2017

    It's very basic. As Solomon Lew says: Listen to your customers, know what they want, source it and range it profitably. That's retailing. reply

  4. Jeanette Bennett posted on November 16, 2017

    Myer should stop discounting, provide the customers with brands that are not elsewhere in the country, in particular at their front door! Why would Myer stock Country Road, Witchery etc when they have their own stand alone stores just steps from Myers front door? The World is full of brands that are not represented in Australia. Come on Myer, have a point of difference! reply

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