Under fire department store Myer has said it is concerned giving billionaire retailer Solomon Lew representation on the company’s board could cause potential conflict with other directors, though it is open to the idea.
In a statement to shareholders after market close on Wednesday, Myer’s acting chair JoAnne Stephenson said the company’s board would seek “constructive dialogue” with Mr Lew following his acquisition of an additional 5 per cent stake in the company.
Myer has been under fire, again, from its major shareholder Solomon Lew.Credit:Peter Rae
On Tuesday, Mr Lew announced he had increased his investment company Premier Investment’s share in Myer to 15.8 per cent and would use his boosted stake to reconstitute the retailer’s board, which he labelled as “emaciated” and “missing in action”.
He also said he was “stunned” that Ms Stephenson had not reached out to him since the exit of former chairman Garry Hounsell at the company’s annual general meeting last year, who quit after losing the support of Mr Lew and other major shareholders.
Ms Stephenson said the company was open to a “constructive and positive” dialogue with its major shareholders and would contact Mr Lew now that the rag trader had upped his stake beyond 15 per cent. Shareholders with 15 to 20 per cent stakes in ASX-listed companies are often given board seats.
“The board is open to discussing appropriate board representation of Premier Investments through nomination to the Myer board,” Ms Stephenson said.
“In considering this, we would need to be satisfied around any issues or potential conflict that Premier’s representation on Myer’s board could create and whether they could be addressed through governance protocols or other means.”
Mr Lew has been a longstanding and often scathing critic of the Myer board and its chief executive John King, and a representative of his being appointed would likely cause conflict due to the historical animosity.
He is also a supplier to the department store and is a competitor through the extensive network of retailers, such as Peter Alexander and Just Jeans, operated by Premier Investments.
Ms Stephenson and the rest of the board will also contact other major shareholders. Myer’s next largest shareholders are Wilson Asset Management, which has been largely supportive of the board’s efforts to turn Myer around, and US investment firm Dimensional.
Myer CEO John King
Myer’s board is keen to have matters resolved “as soon as possible” so Mr King and the rest of the team could focus on the upcoming end-of-year peak trading period, she said.
The acting chair also took the opportunity to defend Myer’s recent performance but did not provide a trading update, which analysts and investors had been hoping for in light of recent lockdowns in Sydney and Queensland.
“We have a well-articulated strategy in the Customer First Plan and it is delivering positive results, as seen at our first-half results despite the ongoing challenges that lockdowns and CBD traffic limitations present,” she said.
“Our balance sheet has been significantly strengthened through tighter inventory management and cash generation, we have improved our range of products, reduced space, significantly grown our online business, all whilst maintaining discipline over costs and capital expenditure.”
At the company’s half-year result in February, Myer reported a $43 million profit, though this was partially aided by $51 million in JobKeeper subsidies.
The Market Recap newsletter is a wrap of the day’s trading. Get it each weekday afternoon.
Most Viewed in Business
From our partners
Source: Read Full Article