Myer hits back at Premier as hostilities escalate

Myer hobartMyer executive chairman Garry Hounsell has hit back at activist shareholder Premier Investments, claiming that it has embarked on a campaign designed to destabilise the 118-year-old department store.

In his most comprehensive response to Premier chairman Solomon Lew yet, Hounsell defended the struggling business, which has come under a barrage of criticism from Premier, its largest shareholder.

“Premier Investments continues to be engaged in a hostile and obstructive campaign that appears to be designed to destabilise Myer,” Hounsell said in a letter to Myer shareholders published on Tuesday evening.

“Premier Investments is conflicted because of it position as a major supplier and competitor to Myer,” he said.

The rebuke is a direct response to Lew’s most recent attack on Myer’s board, which was issued in a letter to shareholders last week, and is the latest point of escalation in an ongoing fight for control over the struggling business.

Myer executive chairman Garry Hounsell (right) with new CEO John King (left).

 Garry Hounsell (right) with new CEO John King (left).

Lew is hoping to oust Myer’s board and appoint three of his own nominees through a possible extraordinary general meeting, having claimed that the future of the department store is in jeopardy under current leaders.

But Myer has taken issue with what it has called “factually inaccurate” remarks in Lew’s recurrent attacks and sought to correct the record on three fronts.

Its first point of call was to address Lew’s claim that Hounsell appointed himself to over-see day-to-day operations of Myer following the departure of former chief Richard Umbers in February.

Lew has been intensely critical of Hounsell and last week took aim at the $83,000 in monthly executive payments outlined for his tenure as interim chief.

Myer said on Tuesday that Hounsell was not “self-appointed” and that he had acted to appoint a new chief executive in John King quickly.

“There was an appropriate board process following the departure of the previous CEO, with an independent committee set up to oversee the transition,” Myer said.

Myer’s second correction related to Lew’s claim last week that Myer had engaged in a program of “extreme discounting” under Hounsell that was hurting profitability.

“Myer has been on an aggressive sales mode for most of this year and it’s just not working,” Lew said last week.

The retailer said on Tuesday that this assertion was false, but it did not provide any further detail.

Reporting Myer’s third quarter sales last week Wednesday, Hounsell warned that fourth quarter profits may be impacted by an inability to move winter stock due to an unseasonably warm start to the cold season.

Myer’s third point of criticism related to Lew’s criticism of Myer board member Julie Ann Morrison, who is also the chairman of its wholly-owned brand sass & bide.

Lew believes Myer’s acquisition of sass & bide was a disaster for Myer that has led to the destruction of around $200 million in shareholder value.

Myer sought to clarify Morrison’s relationship to its acquisition of the brand in 2011 and 2013 and said that the performance of the business had improved since Morrison became chairman of its board last August.

“It is plainly false that Morrison is responsible for the sass & bide acquisition, which occurred in two tranches in February 2011 and September 2013,” Myer said.

Lew warned last week that Myer shareholders should prepare for a fourth profit downgrade in twelve months as the department store finds its feet under King’s leadership.

The department store is expected to report another decline in sales in the fourth quarter and also a full-year loss after incurring a $515 write down in March.

 

Comments

2 comments

  1. Avatar

    Peter posted on May 23, 2018

    Garry Hounsell's comments are quite laughable, Myer has a seriously bad track record over the last so many years that just simply cannot be ignored which Solomon Lew wants to see addressed and rightly so. Solomon Lew's position of being a shareholder, supplier and competitor isn't a weakness but a strength, he has so much more invested in Myer than any of the board. Solomon Lew is a smart operator which Myer clearly isnt. I think Gary's remarks do not hold water but then we will let Myers fiscal results speak for themselves, but I am sure we all know where they are headed. reply

  2. Avatar

    Christine o’Hehir posted on May 24, 2018

    Notice no mention of the 80k a month he is pocketing what a disgrace !! Even more of a disgrace is the way Myer board are treating Solomon lew A decorated award winning retailer with a proven track record . My god are they insane !!! He is the only man for the job he has a team ready that knows exactly what to do ready set go !!! ........ yet once again they replace another out of town suit with another out of town suit and Myer pays the price while once again the new guy walks the floor talks to staff and customers to get up to speed ..... ......all the while Solomon heavily invested already qualified and ready to go has to cop this insanity !!!......time is money people ........ this seems to be an ego driven strategy buy the board who cannot concede that Solomon lew and his team can do the job and they cannot ...... this is so painful to wach If there are any shareholders reading this as an avid retailer myself I can promise you that Solomon lew is the only man for the job . He is not a threat he is an asset the man is to be respected and admired and he should be treated with more respect . They say he wants to come in the back door and pick up Myer for nothing The way it’s traiding I soon it will be worth nothing . Let the man have it for every dollar he makes shareholders will profit In this retail senami Australian retail has experienced the past 5 years MYER is still crashing in stormy seas We’re other retailers ahave crashed or weathered the storm for smoother sailing . It’s all about the right captain and crew needed to stear the ship turn it around because right now there is no captain or crew more qualified steering the ship YOUR CAPTAIN IS SOLOMON LEW wake up people how many hits does MYer have to take !!! Just because it is a publicly listed company does not mean it is a bottomless money pit But the outrageous spending that is going on in that boardroom sure looks like it . Think for a minute would you pay someone 80k a month for what ???? I bet the guy that’s been paid 80k a month wouldn’t even pay 80k a month to himself in his own business let alone anyone else !!! It’s insane coles Myer would turn in his grave . You want coles Myer reincarnated with that rare passion drive and retail blood to succeed That man is Solomon lew And I know coles Myer would give him his blessing . Retail is more than a business it’s an art . Like coles MYER Solomon lew knows the art of retail . And he has the JUST group to prove it . reply

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