42,675 trading days lost: Premier Investments profit hit despite Peter Alexander pyjama boom

42,675 trading days lost: Premier Investments profit hit despite Peter Alexander pyjama boom

Solomon Lew's retail vehicle Premier Investments (ASX: PMV) has seen its profits take a hit during 1H22, with lockdowns impacting more than 40,000 trading days across the group’s brands, although pyjama retailer Peter Alexander bucked the trend by tucking in a cosy record sales result. 

Though group net profit fell by 13 per cent year-on-year to $163.6 million, Lew was pleased with the company's success online – a segment that grew to account for more than a quarter of Premier's total sales of $769.9 million.

Almost 30 per cent of total sales came from Peter Alexander which saw its sales rise 11.4 per cent to $227.4 million, driven by customers splurging during gift giving periods.

“1H22 was one of the most challenging and unpredictable halves of the pandemic,” Lew said.

“Under government mandates, stores in our largest markets were shut for most of the first quarter equating to 42,675 trading days during the period. In the final two months of 1H22, we managed the impacts of the Omicron variant across our entire global business.

“Despite these challenges, Premier has once again delivered outstanding results, reflecting the high calibre of our board, our talented senior management team, and the commitment and dedication of our team members across the globe.”

While global sales only increased marginally by 0.6 per cent to $769.9 million, total sales for Premier's apparel brands dropped by 6.2 per cent to $396.2 million.

After previously recording a sharp rise in sales during the Christmas period of 2020, Jay Jays recently fell back below pre-pandemic levels with an almost 16 per cent year-on-year drop to $95.4 million. Sales at Dotti and Jacqui E were also below their pre-COVID benchmarks, although these retailers witnessed declines in 2020 as well.

Premier also registered a 9 per cent dip in sales for its leading apparel retailer Just Jeans, dropping to $142.3 million.

In contrast, women’s clothing brand Portmans delivered a record first half of $73.1 million – a jump of 16.4 per cent.

Another highlight was stationery retail chain Smiggle which saw global sales reach $146.3 million, representing in a 5.6 per cent increase.

Despite months of school and store closures in Australia and New Zealand, the “back to school” trading period saw sales jump by 16 per cent like-for-like.

Smiggle’s performance in Europe “exceeded expectations” for the half and the brand is “currently cycling the European store closures of 2021.” The Melbourne-based company has also been able to reach favourable property agreements with UK landlords during 1H22.

"It was particularly pleasing to see the record results from Peter Alexander, Portmans and Online,” said Premier Investments CEO Richard Murray, who jumped across to Lew's enterprise last year after a lengthy stint leading electronics retailer JB Hi-Fi Group (ASX: JBH).

For Peter Alexander's founder of the same name, growing his brand over the past 22 years has been no walk in the park.

From wholesale agreements going wrong to managing a boon of mail-order customers from his own home, people doubted he could handle leading the staple sleepwear brand when The Just Group offered to acquire it in 2000.

“Everyone said you’ll last six months there and you won't be able to handle working for a huge company like that,” Peter Alexander said at The Entourage’s 2022 The Entrepreneur’s Unconvention earlier this month.

But even after the acquisition, Alexander remained on board as head of design and marketing.

“I proved them wrong and 22 years later, I still am with The Just Group. We work very well together. We have a great partnership and the brand has just taken off," he said.

“I couldn't be happier.”

Premier Investments added its “strategic decision to invest in its 100 per cent owned Australian Distribution Centre” had allowed it to “remain agile and scale up online fulfillment in response to customer demand.”

“Reviews of the group’s distribution centre capabilities in both Australia and New Zealand continue as part of a long-term strategy to meet ongoing demand as customers change their shopping behaviour,” the group said in the latest ASX trading update.

The retail conglomerate has $468.6 million in cash reserves, and the board has approved a record interim dividend of 46 cents per share, reflecting a 35 per cent jump in comparison to 1H21.

Shares in PMV are down 1 per cent to $28.65 per share at 2:05pm AEDT. 

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