Solomon Lew slams Myer board for slow pull-out from "disastrous" discounting

Solomon Lew slams Myer board for slow pull-out from "disastrous" discounting

Just over a month after calling for Myer (ASX: MYR) chairman Garry Hounsell to step down, the retailer's largest shareholder is on the attack again over the legacy icon's reticent approach to shutting down clearance floors.

Premier Investments (ASX: PMV) has expressed alarm today over media reports in The Australian that the recent decision by new Myer CEO John King to close down the "disastrous" Myer clearance floors has been reduced to a trial closure of only three stores for three weeks.

In a release today, Premier says it believes the development is proof that King is battling against his own board in making the necessary decisions to improve Myer's performance.

At Myer's full year 2018 results announcement on 12 September, King was asked by Shaun Cousins of JPMorgan if he planned to close the clearance floors and his answer was unequivocal.

"Yes. They are going to go. Yes absolutely, I hate them. They are going to go through 2019." King replied at the time.

Premier welcomed what it has described as a "sensible decision" to "rid the business of the blight of clearance floors", but now it says a recent memo from Myer to its suppliers shows it appears King has been "forced to trial the closure" of three stores rather than be done with all of them.

"The awful clearance floors are part of Garry Hounsell's "green shoots" for Myer and it appears he doesn't want to allow Mr King to close them," says Premier chairman Solomon Lew.

"Green shoots don't grow in the dark, Mr Hounsell, but mould does. Don't just switch off the lights for three weeks at three stores s back your CEO and close all of the clearance stores now."

In its release, Premier asked the following questions of the Myer board:

- What is the point of this trial if the CEO is already publicly committed to closing all of the clearance floors by the end of 2019?

- What can be gained by trialling a process of switching the lights off on three stores for three weeks in any case?

- Why should the clearance stock be left in a closed, dark space for three weeks where it cannot possibly be sold? Surely the stock should be written off.

- Is Mr King being forced by his Board to backtrack on his commitment to close all of the clearance floors?

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