Myer board long on hype, says Lew
MYER shareholder and retail rival Solomon Lew has panned the group’s latest financial results, criticising its board for what he says is selective disclosure.
And investment bank UBS says the struggling department store chain must shrink to survive, closing more of its 63 stores.
Mr Lew, who owns 10.8 per cent of Myer through listed investment vehicle Premier Investments, said yesterday the board of the retailer was “long on hype and false optimism and very short on detail”.
Premier has called for Myer directors to be replaced, saying the group will continue to lose value if the existing board stays.
Mr Lew’s latest attack comes after Myer on Wednes- day reported a first-half net loss of $476.2 million — the biggest loss for any half-year period in its 118-year history.
In a detailed analysis, Mr Lew yesterday said the chain had lost control of costs.
“Myer again relied on oneoff and implementation costs to fudge its results,” he said in a statement released by Premier.
“These so-called one-offs actually seem to be more of a constantly recurring feature of Myer’s mathematical gymnastics.”
Mr Lew also questioned higher debt levels owed to sup- pliers despite declining sales.
“Is Myer squeezing its suppliers to hide its inventory problem?” he said.
The store chain declined to comment other than to say Mr Lew had made errors calculating its online business growth.
In a separate analysis, UBS also warned Myer’s struggles would likely continue.
Myer has flagged only one of its 63 stores as loss-making, UBS analyst Ben Gilbert said.
But he added that “we believe a large portion of stores are break-even [and a] drag to margin”.