After releasing disappointing sales results for the holiday period which included Black Friday and Boxing Day sales, share prices in both Premier Investments and Myer fell sharply at the start of this week.
For the 26 weeks ending January 25, 2025, Premier said that its total global sales would be in the range of $855 million-$865 million, with Australian sales “broadly flat.” It forecast its underlying earnings before interest and taxes for H1 2025 to range between $160 million and $165 million – lower than its $204.9 million result (excluding interest revenue) in the prior corresponding period.
It also expected its Apparel Brands business, which consists of Just Jeans, Jay Jays, Portmans, Dotti and Jacqui E to deliver global sales for H1 2025 in the range of $405 million – $412 million and underlying EBIT in the range of $31 million to $35 million, $16 million to $20 million less than for the first half of 2024.
Over at Myer, things were bleak too as it announced that in the 22 weeks to December 28, total sales were approximately $1.59 billion, down 0.8% on the prior corresponding period.
Operating gross profit at Myer was approximately $560 million, down $15 million on the prior corresponding period while earnings before interest and taxes was approximately $48 million, a decrease of around $16 million.
While both Premier and Myer saw their share price fall double digits on Monday, it is now slowly rising after an independent expert has issued a statement in support of Apparel Brands’ upcoming merger with Myer.
On Thursday, Premier’s shares were up around 5.8% around noon at the $28.54 mark, while Myer was also recovering with its share price climbing 3.27% to reach $0.85.
Although, Myer’s share price is still down around 14% compared to its closing price at the end of last week, and Myer’s is down around 27%, both are now showing signs of a recovery.
It comes following a filing to the ASX on Wednesday by Myer that showed an assessment by independent expert Kroll Australia contends that the combination of Premier’s Apparel Brands and Myer is fair and reasonable to non-associated Myer shareholders, in the absence of a superior proposal.
In a supplementary report to its previous assessment of the deal, Kroll said on Wednesday morning that it now estimated value of the combined group worth 81¢ to $1.04 a share, down from 95¢ to $1.22 previously.
Kroll also slashed the value of the five brands that Myer plans to buy to $733.4 million to $828.4 million, from its original equity valuation of $848.3 million to $946.3 million.
The value of the Myer shares to be issued to Premier investors as payment for the fashion brands was also cut to between $696.8 million and $901.2 million, from $824 million and $1.1 billion.
Premier has said that its board of directors continue “to unanimously recommend that Premier shareholders vote in favour of the proposed resolutions” at the general meeting scheduled for January 23. Myer which will hold its extraordinary general meeting on the same day has also asked its shareholders to back the deal.
If the deal is voted on favourably, Myer will acquire Just Jeans, Jay Jays, Portmans, Dotti and Jacqui E from Premier Investments. Apparels more than 700 stores will then be added on to Myer’s portfolio of around 56 stores.