newsCO.com.au | Lew showdown looms at Myer AGM

November 23, 2017

@newsCOflash

2017-11-23 05:47:12

Myer’s annual general meeting is shaping up as a public showdown between the board of the beleaguered department store chain and retail veteran Solomon Lew.

Mr Lew has called on his fellow shareholders to join him in voting against of all Myer’s resolutions in Melbourne on Friday as a protest against its falling share price and struggling sales.

This could lead to a first strike on Myer’s remuneration package if 25 per cent of shareholders vote against it.

Mr Lew, whose Premier Investments retail group is Myer’s largest shareholder is expected to attend the AGM in person.

Premier’s 10.77 per cent stake has lost significant value since it bought it in March, with the department store’s shares dipping amid an ongoing slide in sales.

Mr Lew has in recent months publicly criticised the board’s ability to turn around Myer’s fortunes under the five-year “New Myer” strategy that is now two years old.

He has accused Myer of having lost its way and of being run by consultants, and has slammed the stock being offloaded in dedicated discount floors as being outdated and belonging in a charity store.

Mr Lew has been urging Myer shareholders to vote against the appointment of three directors, including chairman Garry Hounsell.

His war with the board escalated after they rejected his request in October to have two of his own representatives on the Myer board, plus an independent director.

Myer has said Mr Lew’s request would hand too much control to Premier, which has a conflict of interest as one of Myer’s largest apparel suppliers.

Mr Hounsell has also claimed Premier had once sought him out to be its chairman but a spokeswoman for Premier said this was a “lie and a fabrication”.

Mr Hounsell also said Premier wants shareholders to reject a resolution that aims to protect Myer from a takeover, when Premier is putting up the same protection at its AGM in November.

Myer’s sales in the first quarter of the financial year dropped 2.8 per cent to $699 million, and its comparable sales were down 2.1 per cent.

However, a 5.3 per cent fall in first-quarter sales at David Jones implied Myer outperformed its rival during the period, Deutsche Bank analyst Michael Simotas has said.

The Australian Shareholders Association is encouraging shareholders to support all of Myer’s resolutions.

The ASA said in a statement that, while there are concerns about Mr Hounsell’s workload, he has said he will resign from one of his other board positions this month.

He is chairman of Helloworld Travel and a non executive director of Treasury Wine Estates and Dulux Group.

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