Premier Investments (ASX:PMV), led by Solomon Lew, has decided to postpone its plans for a demerger of the children’s stationery brand Smiggle as it shifts focus toward a potential partnership with department store Myer (ASX:MYR).
Premier stated it would prioritise exploring the potential synergies with Myer, aiming to create shareholder value.
The company noted that while the board still sees merit in the proposed demerger of Peter Alexander and Smiggle, discussions with Myer have taken precedence.
Consequently, Premier has halted plans to proceed with the Smiggle demerger by the previously anticipated deadline of January 2025.
Lew commented on the situation, indicating that the demerger could be revisited after evaluating the Myer proposal.
"The demerger is still being worked on, but will be looked at at a point in time post-Myer," he said, emphasising the thorough analysis conducted on the Myer proposal.
Despite the strategic shifts, Premier’s performance showed some challenges.
The retailer reported a profit of $257.9 million for the year ending July, reflecting a 4.85% decrease from the previous year, while revenue dropped 2.7% to $1.62 billion.
The retail division, which includes Smiggle, Just Jeans, and Portmans, saw earnings decline by 8.6% to $325.9 million.
However, the sleepwear brand Peter Alexander achieved record sales of $508.6 million, a 6.2% increase, and is set to expand into the UK market with plans for three new stores and an online presence by November. In contrast, Smiggle's sales fell 7.4% to $296 million.
Lew also confirmed an ongoing search for a new CEO for Smiggle following the recent dismissal of John Cheston, who was accused of serious misconduct shortly after being hired.
Lew refrained from commenting on any potential legal actions against Cheston but noted that the Smiggle management team had struggled with focus.
At the time of reporting, Premier Investments’ share price was $30.40.