Myer Shares Surge, What Strings Is Former JB Hi Fi Boss Pulling?
Richard Murray the former JB Hi Fi CEO is on gardening leave but that has not stopped insiders speculating that he is already helping his new boss, Solomon Lew’s of Premier Investments mount a major new tilt at Myer.
As Lew lobbed verbal grenades at the Myer board yesterday, he was with a lot of noise, increasing his stake in the struggling retailer to 15.77 per cent, after buying 41.1 million shares, priced at 40c a share.
Insiders have told ChannelNews that Lew wants Myer, and that Murray will run the operation after he quite JB Hi Fi to join the owner of retailers Smiggle, Peter Alexander, Just Jeans, Jay Jays, Portmans, Jacqui E and Dotti.
Premier Investments also own a major share of appliance brand Breville.
If Lew gets Myer, Murray is tipped to already have a plan to transform the struggling retailer with new stores in new locations and away from CBD areas.
One analyst said “Could you imagine a department store with wine bars and a brewery along with places where one can eat and then shop. This is the future of retail and I believe that Solomon Lew already has a plan for Myer that could see them take on not only archrival David Jones but Harvey Norman, JB Hi Fi and The Good Guys in the future”.
Yesterday Lew called for all directors to resign “immediately”, branding them “missing in action” as Myer battles the worst retail conditions in decades and the fallout of the coronavirus pandemic.
The appointment of Murray has exited several investors in the struggling retailer and Lew is now rallying other shareholders to support the dumping of existing Myer management.
“Premier calls on the failed Myer board to resign immediately. We will work with other shareholders to reconstitute the Myer Board with directors who have expertise across retail, property, logistics and e-commerce so that Myer can reverse its decline,” Mr Lew said.
One area of concern is whether Murray has the pulling power to lure current JB Hi Fi and The Good Guys management who are seen as among the best in the Country to a Murray run Myer.
Some insiders at JB Hi Fi, claim that Murray who has close ties to the Liberal Party wants to one day join the political ranks and aspires to be a key Federal politician “If not a future Prime Minister” said a former direct report to Murray.
Recently JB Hi Fi management appointed Terry Smart to run the business, an accountant, and former CFO and then CEO of JB Hi Fi and of late CEO of the JB HI Fi owned The Good Guys Smart is the man who many say was “always the heir apparent to run the JB Hi Fi operation into the next decade”.
“Smart is a diehard retailer, he knows the business inside out and he will set about restructuring both of their operations for the future. He wants more than just margins, he wants to grow a business that has a long-term future, one that one day is saleable”.
“You will see new categories introduced along with new store layouts. Online will be significantly expanded and as for a fight with Murray at Myer Terry Smart is the one who has the skill set to win a fight. You only have to look at the transformation of The Good Guys since Smart took over” they said.
One retail analyst told ChannelNews that Smart was approached before Murray to join Premier Investments.
Now Lew is on the war path with him claiming “Something has to change, and Premier has put itself in a position to make change happen.” He said.
This morning Myer shares are up 19.01% to $0.42, while Premier Investment shares are down $4.49% to $27.26.
Myer has declined to comment on Mr Lew’s latest outburst.
According to the Australian newspaper Mr Lew took particular umbrage at Myer’s acting chair JoAnne Stephenson, who assumed the top job following Garry Hounsell’s shock exit ahead of last year’s annual meeting.
“We remain bitterly disappointed by Myer’s performance which continues to be disastrous for Myer’s many shareholders, employees, suppliers and customers,” Mr Lew said.
“It’s now been more than eight months since then Myer chairman, Garry Hounsell abruptly resigned on the morning of Myer’s 2020 AGM citing lack of key shareholder support for his re-election. On that day, Myer announced that Ms JoAnne Stephenson had been appointed acting chairman of Myer while a global search would be undertaken to find a replacement chairman.
“We are stunned that Premier has not heard from the acting chairman at any stage. Neither the acting chairman nor any of the remaining directors have bothered to pick up the phone to the company’s major shareholder about reconstituting Myer’s emaciated board which is bereft of the retail experience, skills and talent required to turn the business around.”
Mr Lew has been calling for Myer’s board to be dumped for the past two years. His battle with the department store’s directors got so bad that Mr Lew accused Mr Hounsell of being a liar and lawyers were nearly brought in as the two businessmen went to war in front of shareholders and the market.