Myer chairman: Premier must pay a premium

MyerBourkestreet

Updated: 13:05 AEST

Solomon Lew’s campaign against Myer’s board has alienated an important business partner, Myer’s outgoing chairman Paul McClintock has told shareholders.

McClintock had earlier addressed shareholders at Friday’s annual general meeting on whether the company will be able to finish its “new Myer” turnaround strategy – which is opposed by Lew, who is Myer’s largest shareholder via his Premier Investments, and a critic of the current Myer board.

Lew both won and lost at the AGM, with shareholders delivering a first strike against Myer’s remuneration report, with proxy votes of 29.3 per cent voting against – meaning a ‘second strike’ next year at the AGM would trigger a full spill of the board.

Lew however failed in his bid to vote down the re-election of three Myer directors, with votes against the election of JoAnne Stephenson 29.99 per cent; against Garry Hounsell 29.34 per cent and against Julie Ann Morrison 28.73 per cent.

“I believe that the roles of aggressor and partner are inconsistent, and that Premier shareholders will come to the view that this campaign has alienated one of their important business partners,” McClintock said.

Myer CEO Richard Umbers told the meeting there has been no improvement in trading in the second quarter of 2017/18.

This follows a 2.8 per cent drop in first-quarter sales that was reported by the company earlier in November.

Myer shares were down 0.25 cents to 70.75 cents at 1122 AEDT.

“Let me be clear to shareholders that the board has at all times remained focused on you our shareholders and therefore were never going to let a shareholder or competitor have undue influence on the board,” said McClintock.

“Don’t get me wrong,” he said.

“I’m not phased in the slightest that the board has come under attack – that goes with the territory – but as a representative of you, our shareholders, I am most concerned that tactics employed by Premier threaten the successful transformation of this great business, for our customers, for our shareholders and, for our team members.”

McClintock said that several experential initiatives including ice skating, Teslas in stores, Katy Perry, new cafes and pop up shops have all featured in the past 12 months and dedicated clearance floors, which are now in eight stores, “will take some time to reflect in sales, which in the short term reflect external conditions as much as the changes we are making.”

McClintock also said Lew’s letter sent to shareholders outlining the veteran’s turnaround strategy was not a plan for Myer, but for “Premier to run Myer for the benefit of Myer.”

“This would be achieved by installing their three nominees onto Myer’s board, selling more of their products in Myer’s stores and capturing the benefits of our attractive rentals in major shopping centres for the benefit of their own brands.

“If Premier Investments wants to secure those benefits for their shareholders, then they must pay you a premium for that benefit.”

More to come…

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