Lew in coup to snare Murray
SOLOMON Lew is placing the future of his clothing empire in the hands of Richard Murray after poaching the JB Hi-fi chief executive in one of the biggest retail coups in years.
Mr Lew stunned his own shareholders in Premier Investments as well as investors in JB Hi-fi when, before the market opened on Wednesday, he named the consumer electronics boss Mr Murray as the successor to outgoing Premier CEO Mark Mcinnes.
Once the most powerful double act in retail, Mr Lew will now take on a new CEOsidekick in the JB Hi-fi boss at a time when shares in his Premier Investments are trading at record highs, sales are booming and it has more than $400m to invest.
It will hand Mr Murray the keys to Mr Lew’s most profitable and well-known fashion and apparel ventures, which sit within his $4.2bn Premier Investments group — including stationery chain Smiggle, sleepwear brand Peter Alexander and clothing stores such as Just Jeans and Dotti.
Mr Murray will take a seat at the Premier Investments board table alongside his new chairman Mr Lew, although he will not be involved in Premier’s discussions around its $1bn equity stake in Breville or its 11 per cent stake in Myer, in keeping with non-compete deals with JB Hi-fi.
The market didn’t view Mr Murray’s affinity with iphones and a lack of experience with skirts and blouses as a disadvantage, sending Premier Investments shares almost 3 per cent higher on news of his appointment. JB Hi-fi shares, on the other hand, plummeted 7 per cent on the news, with Mr Murray’s departure in August enough to wipe $375m from its market capitalisation.
Shares in JB Hi-fi later mounted a comeback, helped partly by news that Terry Smart, the former JB Hi-fi CEO and current boss of its whitegoods business The Good Guys, would be returning as CEO to lead JB Hi-fi when Mr Murray leaves.
In a move that nobody could have predicted, Mr Lew utterly ignored the traditional method of hiring highly paid headhunters to scout out a list of candidates and instead sought out Mr Murray when outgoing Premier CEO Mr Mcinnes announced in January his plans to step down to spend more time with his young family.
The JB Hi-fi boss will leave the consumer electronics giant at the end of August and will start at Premier Retail as its CEO and a Premier Investments executive director on October 4.
Mr Murray was the only candidate for the role. When first approached informally by Mr Lew his interest was pricked and he found that he couldn’t resist the opportunity, deciding to bring to an end almost 20 years at JB Hi-fi.
The money now being thrown at Mr Murray by billionaire Mr Lew also helped.
It is estimated that Mr Murray’s total package — including sign-on bonuses, options, wages and other performance benefits — will mount to more than $42m over six years.