Solomon Lew Claims “Even Father Xmas Can’t Turn Myer Around”
He owns more than 10% of the shares in Myer, now Melbourne based retailer Solomon Lew claims the big department store board should be dumped after trying “to hide” woeful trading numbers.
His comments come days after the ASX suspended trading in the big retailer after secret trading numbers revealed a downward trend that had not been revealed to the market. ChannelNews last week reported that sales for the first quarter of 2018-19 had plunged by 4.8 per cent as it belatedly responded after a day of high drama driven by a story in the AFR and ChannelNews.
Lew who holds 10.8% of Myer warned that the board of Myer was failing and the drop in first-quarter sales signalled an alarming trend. His stake has more than halved in value since he acquired it in early 2017. He has been arguing for months that the company has lost its way and has waged a public campaign to discredit the board.
“A sales drop of 4.8 per cent (nearly one in every $20 of sales disappearing) is something that even Father Christmas can’t turn around,” he told the AFR.
ChannelNews understands that some sound, appliance and consumer electronics suppliers are starting to “get worried” with three key suppliers telling ChannelNews that they have a “watching brief” on the big retailer.
“Myer’s admission that its online sales growth has flatlined is also of major concern as this should be an automatic area of growth in line with every other retailer”. Lew said.
Mr Lew and Premier is trying to oust the board at the November 30 annual meeting and wants other Myer shareholders to vote with him against the remuneration report, to bring on a second strike in consecutive years which triggers a spill of the board under Australia’s corporate regulations.
“The failed Myer board must go,” Mr Lew said.
He also pointed out that Myer’s net debt position had only moved by about $1 million from Myer’s published position at the end of July, despite the company having cancelled its dividend payments and that would make the banking syndicate nervous.
He said, “the numbers don’t lie”. No matter how hard the Myer board “tried to hide them”.
Myer claims that new chief executive John King’s strategy is to chase unprofitable sales.
Desperate Myer executives hit out claiming that the reporting and the leaking of their results was based on “unlawfully leaked, draft and incomplete financial information taken from an unapproved internal document relating to part of the Myer business”.
The AFR said that the ASX compliance unit was annoyed at a vague statement released by Myer earlier on Friday to the ASX, which didn’t address the specific information in the article.
After a series of phone calls between the ASX and Myer, the ASX insisted that Myer go into a temporary trading halt pending more specific information being released.