Myer's (ASX: MYR) leading shareholder has demanded chairman Garry Hounsell "step down immediately" after the retailer reported a net loss in FY18 that is almost $130 million larger than its market capitalisation.
Premier Investments Limited has been consistently railing against the Myer board's decisions over the past year, a period in which its share price has almost been slashed in half amidst poor results and negative market sentiment.
In a release, Premier claimed its calls for action have been ignored and its request for board representation has been rebuffed. The fund's chairman Solmon Lew describes the Myer board as "an absolute disgrace".
"Sales are down. Profits are down. Service levels are down. CODB [cost of doing business] has increased. Dividends have ceased," says Premier's chairman Solomon Lew.
"The banks are now firmly in control of Myer - it will be run from now on by its bankers.
"The banks have taken a security charge in front of staff, suppliers, landlords and other creditors. This will further erode Myer's goodwill with its partners. And interest costs are way up on the new loan facility, which will exacerbate the losses."
Lew agrees with Myer's recognition that shareholders deserve better, and claims Myer shareholders have spent the last year "paying for Garry Hounsell's retail traineeship".
"Mr Hounsell must step down immediately or risk having his Board spilled by a strong shareholder revolt at the upcoming AGM," says Lew.
"Premier will move forward to protect all shareholders, staff and stakeholders. We will not allow this failed Board of directors some of whom are currently in front of the Federal Court for failing to act in best interests of shareholders to run Myer into the ground.
Premier added that rather than retaining retail talent Myer was 'removing' a number of senior roles, while its online growth was slowing and damage to the brand "has already been done" thanks to clearance floors which new CEO John King has agreed to close.Never miss a news update, subscribe here. Follow us on Facebook, LinkedIn, Instagram and Twitter.
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