Lew demands Myer update market on sales ahead of board showdown
Billionaire retailer Solomon Lew has demanded struggling department store Myer immediately update shareholders on the company’s full-year trading performance to give potential board nominees more information ahead of a likely end-of-year reshuffle.
In a statement on Tuesday, the Premier Investments chairman and majority Myer shareholder said the retailer should give shareholders an update on its recent trading performance given the major lockdowns in Sydney, Brisbane and Melbourne since the end of the financial year.
Myer last updated the market on its performance at its half-year results in March, and since then shareholders and analysts have questioned why the company had not provided a trading update like many of its retail peers.
“[Since March] Australian retailers have had to deal with continuous temporary closures in response to COVID19 outbreaks across all major cities, constant changes in Australian consumer confidence and the continued fluctuation of shopping activity in Australia’s CBD stores where Myer has a very significant portion of its major stores,” Mr Lew said.
“Given the level of uncertainty and the large loss incurred last year by Myer (a net loss after tax of $172 million), Premier is requesting that Myer immediately update the market on its expected FY21 results.”
Mr Lew has also outlined his expected composition of a new Myer board and requested the company provide shareholders with an “appropriate window” between the release of its full-year results and the calling of its annual general meeting, in order to provide potential board nominees with enough time to assess if they want to put themselves forward for the role.
In what the veteran rag trader labelled a “common sense” approach, Premier has written to Myer’s acting chairman JoAnne Stephenson to request a longer window. Last year, Myer issued a notice of annual general meeting just 19 days after reporting its full-year results.
Doing so would allow ample time for shareholders to decide on the composition of the Myer board without the need for an “unnecessary, distracting and expensive” extraordinary general meeting, which Mr Lew has threatened to call recently in order to depose the company’s board.
However, if Mr Lew’s proposal is not agreed to, Premier warned it will have no alternative but to call an EGM in “close proximity” to Myer’s AGM.
Mr Lew and Premier have been agitating for a drastic reshuffle of Myer’s board since early July when he acquired an additional 5 per cent of the company, bringing his majority stake up to 15.6 per cent.
Despite Myer subsequently offering Premier a board seat, the retailer said he had nothing to gain from negotiating with the existing members, calling instead for all three remaining non-executive directors to step down.
Previously Premier had not indicated how many directors of its own it hoped to appoint to the board, but on Tuesday it revealed it expected the board to have a majority of “well-credentialed independent directors” including an independent chair and two Premier nominees.
If Myer’s board size remains at just four, this would mean half the board would be Premier nominees, with the other half comprising of chief executive John King and the independent chair. Shareholders have recently raised concerns Mr Lew could look to ‘stack’ the board with his own people and gain effective control of the retailer.
Premier said it was currently in discussion with a number of candidates but could not seek their commitment without first seeing Myer’s 2021 results.
“The Myer Board have stated that they are committed to working constructively with Premier as its largest shareholder, and our proposal is a constructive and pragmatic way of resolving the composition of the new Myer Board which is demonstrably in the best interests of all shareholders,” Mr Lew said.
“The Myer Board has the capacity to make a common-sense decision which will avoid a costly EGM and ensure a smooth transition.”
Myer has been contacted for comment.
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Dominic Powell writes about the retail industry for the Sydney Morning Herald and The Age.
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