Lew to landlords: "We'll shut more stores"
Billionaire retail mogul Solomon Lew says he's prepared to close more of his Premier Investment-run stores if landlords refuse to play ball during the COVID-19 outbreak.
Mr Lew said on Friday the virus outbreak had severely disrupted trading after an otherwise solid first-half for the company where profit rose 12.2 per cent to $99.6 million despite bushfires, Hong Kong protests, and Brexit disruptions.
Mr Lew said his brands - particularly clothing outlets Peter Alexander, Dotti, Portmans, Jacqui-E, Jay Jays and Just Jeans - outperformed rivals during the period with comparable sales growth up across the board.
Despite its share price dropping by nearly 40 per cent in 2020 to a more than five year low, Premier will pay a fully franked interim dividend of 34.0 cents - up one cent on a year ago.
However, it won't be paid until September, three months after the interim dividend was paid in 2019.
Mr Lew said the emergence of the coronavirus signalled "significant hardship" ahead for the company.
Trade in all Premier Investment Brands brands in Australia and New Zealand has sagged in the new year as tourist store sales, which the company said were historically supported by international students, slump.
Mr Lew said Smiggle Hong Kong, Singapore and Malaysia trade has also been severely disrupted while trade at the brand's operations in Ireland and UK has deteriorated significantly since the announcement of a global pandemic.
Mr Lew said landlords had a major role to play to ensure retailers can operate in the short term "for the long term benefit of all stakeholders".
The company has already closed 33 stores during the last 12 months and a total of 134 stores closed over the last seven years as it demands landlords adjust rental expectations in line with the performance of their own centres.
Close to 70 per cent of Premier's stores in Australia and New Zealand are already in holdover or have leases expiring in 2020.
"Since the outbreak... we have closed two stores in Hong Kong, and we are prepared to close many more stores globally if landlords do not respond to the current crisis," Mr Lew said.
Friday's trading update cast a shadow over what was an otherwise stoic first-half earnings result. Net profit for the six months to January 25 was up 12.2 per cent at $99.6 million.
Total retail sales jumped 7.6 per cent to a record $732.1 million as total like-for-like sales rose by 4.3 per cent.
Sales across apparel brands were particularly strong, rising 6.1 per cent to $393.5 million, with like for like sales growth of 7.5 per cent for the period.
This brings like-for-like apparel sales growth to 16.9 per cent on 1H18.
Peter Alexander sales grew by 11.1 per cent to $144.8 million, underpinned by strong like-for-like growth.
Kid-focused stationery chain Smiggle posted record global retail sales, including from wholesale partners, as reported revenue rose 8.3 per cent to $193.7 million.
Premier said its $245.6 million stake in appliance manufacturer Breville had a market value of $707.4 million at January 25 - but since then the company's share price has fallen by more than a third.
Premier also has a $40 million stake in struggling department giant Myer, which has also been battered by a fall in foot traffic.
Premier Investment shares were worth $10.37 before trade on Friday - a more than five-year low - but spiked more than 18 per cent to $12.30 after markets opened.
Shares in the company were 13.21 per cent higher at $11.74 by 1148 AEDT.
Premier declined to provide full-year guidance.
PREMIER INVESTMENT FLAGS HARDSHIP AHEAD
* First half retail sales up 7.6pct to $732.1m
* First half net profit up 12.2pct to $99.6m
* Interim dividend up 1.0 cent to 34 cents, fully franked. Payment to be made in September.
Back to Breaking News
Print this page