Solomon Lew’s Premier Investments has upped its stake in department store Myer to 31.37 per cent following a slow and steady creep up since March 2021.
This is up from 29 per cent reported in March 2024, and 26 per cent in late February.
Premier Investments owns six apparel brands including Peter Alexander, Just Jeans, Portmans, Dotti, Jay Jays, Jacqui E, as well as accessories retailer Smiggle.
According to analysts at investment bank Citi, in a recent note to clients last month, Premier could creep up on department store Myer and take control in less than four years without making a takeover bid.
The note revealed that Premier “is likely to take control at some point” if its share acquisition patterns persist.
“If PMV continues to creep up the share registry at 3% every six months (regulatory maximum), a controlling stake could be attained in three and a half years."
According to Citi analysts, if Myer was taken over by Premier it would expect a potential sales and margin uplift as Premier replaces underperforming products in Myer with its higher-margin range, which could amount to a circa 2 per cent of combined operating profit.
Around 26 per cent of shopping centres with a Myer store house four or fewer Premier brands - which include The Just Group brands as well as Peter Alexander. This increases to 36 per cent which houses three or fewer brands.
“We estimate that there could be ~$10 million of EBIT uplift from introducing the higher margin Premier products into Myer, or ~2% of combined FY24e EBIT.”
Analysts also expect a distribution centre consolidation between Premier’s leases in Melbourne - excluding Truganina - and Myer’s Ravenhall NDC, as well as harmonisation of supplier terms, and the expansion of Myer’s vertical integration and associated margin benefits.
“We estimate at least $25 million in potential synergies,” City analysts said.