An angry Solomon Lew has slammed department store Myer over old stock that “belongs in the Salvation Army” and poor performance he says has cost him $33 million on his investment.
The retail mogul, whose Premier Investments reported higher full-year profits on Monday, attacked Myer management for not revealing massive writedowns that drove the company’s annual profit down 80 per cent and triggered a slide in its shares earlier in September.
Mr Lew, Myer’s biggest shareholder, said Myer is trying to sell apparel that is up to three years old and should be in an op shop.
“You know that by seeing their most recent forays into the discounting and opening of these outlet floors that the stock is two to three years old,” Mr Lew said.
“That inventory belongs in the Salvation Army.”
Premier Investments, through which Mr Lew holds his 10.77 per cent Myer stake, has lost $33 million from its investment in Myer, he said.
The stake was worth $101 million when Premier bought in late March and the retailer’s full-year results show the stake was worth $67.7 million by the end of Premier’s 2017 financial year, after Myer’s share price slumped 36 per cent.
Mr Lew said he was bitterly disappointed in Myer’s performance and he did not believe the company said enough about its troubles during its annual general meeting in late 2016 and at its half year results in March.
“They were still talking the business up, notwithstanding they had a poor clearance in January,” the Premier chairman said.
In July Myer announced writedowns of $45.6 million on Top Shop and Sass & Bide, and Mr Lew said he believes the latter probably has another $35 million in writedowns and trading losses still to be announced.
Mr Lew, a former chairman of Coles Myer, said he was spending weekends in Myer stores and believes they have too much of what consumers don’t want and are constantly having stocktaking sales.
Despite Premier’s majority stake, the group does not have a seat on the board and Mr Lew said there were no discussions underway with Myer about changing that.
Myer revealed earlier this month that its statutory net profit dropped 80 per cent to $11.94 million in the 2017 financial year due to writedowns and a fall in revenue.
At 1419 AEST, shares in Myer were down half a cent, or 0.7 per cent, at 71.5 cents, while Premier’s shares were down 37 cents, or 2.7 per cent, to $13.38.