Lew’s Premier retail stable delivers “strong result”

Solomon Lew (right) and Premier CEO Mark McInnes

Solomon Lew (right) and Premier CEO Mark McInnes

Premier Investments has unveiled a 9.4 per cent increase in half-year net profit to $78.6 million on the back of strong sales at Smiggle and Peter Alexander, which off-set mixed performance from its other business units.

Underlying earnings before interest and tax (EBIT) – excluding $6.2 million in costs related to its investment in Myer, moving head office, litigation and Smiggle’s European expansion – increased by 10.2 per cent to $102.5 million for the half-ended 27 January.

Top line sales increased by 7 per cent to $630.1 million on the back of a 2.4 per cent increase in like-for-like (LFL) sales on a constant currency basis.

Smiggle was once again the star performer, with total sales up 26.7 per cent to $170.7 million on the back of 35 store openings globally.

Peter Alexander booked a 15 per cent increase in top line revenue to $114.4 million with 12 new stores opened.

Premier did not specify LFL sales for Smiggle or Peter Alexander, but said comps were “strong” in both cases.

“Premier Investments has again delivered a very strong result,” said Premier chairman Solomon Lew.

“This is the first time the business has achieved an underlying EBIT above $100 million for a half, it was only two and a half years ago that we announced, for the first time, an underlying EBIT above $100 million.”

“Customers are choosing which channels and locations they want to shop in, and everyone in the Premier Retail team respects and embraces the customers’ choice,” Lew said.

“As we have said before, where landlords to not continue to invest in overall shopping experiences and/or adjust their rent expectations in line with the performance of their own centres and the major shift in consumer behaviour, further store closures will be necessary.”

Premier said it closed 10 stores in the first-half, including the Just Jeans and Portmans flagship stores in Melbourne’s Bourke Street Mall.

Apparel brands improve

Apparel brands Portmans and Jacqui E delivered an improved performance in the second-quarter on the back of a rejuvenation strategy, but Just Jeans and Dotti struggled to deliver.

Portmans booked a 19.8 per cent increase in LFL sales in the second-quarter, and a 33.4 per cent increase in January.

Jacqui E’s LFL sales were up 6.8 per cent in the second quarter and increased by 10.1 per cent in January.

Just Jeans booked top line growth of 4.7 per cent in the first-half, but LFL sales declined by 3.6 per cent, returning to positive LFL sales in the first-six weeks of the new season.

Premier did not provide specific figures for Jay Jays, but said LFL sales were positive, despite it operating in an “extremely competitive and difficult market segment”.

Dotti was singled out as an “extreme disappointment” and earmarked for improvement, but Premier provided no specifics on how the brand performed in the first-half.

Online sales grew 71.2 per cent on the first half of FY17, now representing 10.2 per cent of the Premier’s sales.

“Our customers are rapidly choosing the online platform from which to shop,” said Mark McInnes, Premier CEO.

McInnes said the company’s online division, led by group general manager of internet and marketing Georgia Chewing, now expects to reach Premier’s 2020 target of $100 million in annual online sales in the current calendar year.

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