Premier Investments delays Smiggle spin-off

Premier Investments has postponed its planned Smiggle spin-off to January 2025, shifting focus to a potential merger of its apparel brands with Myer. Executive chairman Solomon Lew remains optimistic about the Myer deal, though due diligence is ongoing.

Premier Investments reported mixed results for the 2023-24 financial year:

• Net profit fell 4.9% to $257.9 million

• Revenue dropped 2.7% to $1.6 billion

• Peter Alexander sleepwear brand grew 6.2%

• Smiggle sales slumped 7.4% to $296 million

• Final dividend increased 16.7% to 70 cents per share

Lew partly blamed Smiggle's poor performance on former managing director John Cheston, who was terminated on 9 September for alleged misconduct. Cheston denies any wrongdoing.

Premier's apparel brands, including Just Jeans, Portmans, Dotti, Jay Jays, and Jacqui E, saw a combined 6.4% drop in sales to $791 million.

The company's shares fell 9% to $30.61 following the trading update, wiping $490 million from its market value.

Early trading in the new financial year shows softness outside Australia, with global sales down 3.5% in the first seven weeks. Australian sales for the same period rose 0.2%.

Regarding the potential Myer merger, Lew highlighted the profit discrepancy between Premier (20 cents per dollar) and Myer (1.5 cents), suggesting significant upside potential with the right structure.

Peter Alexander plans to expand into the UK market, opening three stores in November alongside an online presence.

Premier Investments also holds a 25.5% stake in kitchen appliance company Breville.