A major fashion retail consolidation is looming in Australia, as department store Myer considers buying up more than 700 of Premier Investment's apparel stores, including Just Jeans, Jay Jays, Portmans, Jacqui E and Dotti.

Retail analyst Geoff Dart said the deal makes sense for the 124-year-old Myer, which has been struggling to appeal to younger shoppers and has "nothing to lose" from buying up the fast-fashion chains.

"Myer has a stigma of being for older people," he told the ABC.

"This could be a way of mitigating the continued failure of Myer."

Premier Investments is an ASX-listed company, which is led by retail titan Solomon Lew.

It owns brands Smiggle and Peter Alexander and more than 31 per cent of the ASX-listed Myer.

"[Solomon Lew] has always had a love for Myer," Mr Dart said.

The businessman has also dived into David Jones and Country Road, where he made massive profits, and been actively involved in managing a range of other clothing brands through Premier.

How are the fashion chains performing?

As Myer considers the deal, Premier Investment has issued a warning about weaker than expected sales.

In a market release to the ASX about its looming full year results on September 25, Premier said global retail sales for the 2024 financial year would be $1.6 billion, with earnings before interest and tax in its retail business $341 million.

This would be below Premier's 2023 sales of $1.64 billion, and the market consensus forecast for 2024, which had estimated $1.63 billion. 

"[It] highlights trading conditions across 2024 were tough, consistent with most other discretionary retailers that have recently reported," E&P Financial Group analyst Phillip Kimber wrote in a note seen by Reuters.

Premier Investments did not respond to the ABC's queries. 

Analysts at IBISWorld believe the Myer and Premier Investments apparel merger would help Premier "leverage Myer's assets and services", including its loyalty program and online sales platforms, to expand its scale and customer base.

"[It] could lead to significant expansion for Premier, with Myer's financial backing," they added.

Over the weekend, Myer told the ASX its "comparable" sales for the last financial year were up just 0.4 per cent on the previous year, with real sales actually down 2.9 per cent after it closed two stores in Brisbane and Melbourne's south.

"I think current management has done the best with what they have to restore it to profitability," Mr Dart said.

Myer has previously tried to get in front of younger shoppers by buying up once-cult brand Sass & Bide in 2011.

Last month, it announced it will be closing 10 of the Sydney-founded brand's standalone stores.

"The stores that will close are Bondi, Miranda, Canberra, Chadstone, Doncaster, Emporium, Rundle Street, Newmarket (NZ), Karrinyup and Paddington," chief executive Paula Mackenzie said in a statement.

"With the planned closure of S&B standalone stores, there will be a reduction in roles in our support office."

Myer said it will be boosting the sale of Sass & Bide products in its actual department stores, along with ranges from two other brands that it owns, David Lawrence and Marcs.

In its market update, Myer said all three of these brands have been "underperforming" and their declining sales would represent a big chunk of its lowered net profit after tax.

"They thought [Sass & Bide] would attract the young generation into the stores but it didn't work," Mr Dart said.

Myer proposal has 'pros and cons'

Myer's proposal to buy Premier Investment's apparel brands was released in June, with the board of Premier determining the proposal "warrants further consideration". 

Premier's apparel brands business includes Just Jeans, Jay Jays, Portmans, Jacqui E and Dotti.

The retail merger would see Myer acquire the apparel chains in exchange for Myer shares, which would then be distributed to Premier shareholders.

Stock analyst Ben Williamson, who is the co-founder of Investor Hub, said this deal could go either way for Myer, as it could see it with shareholders who haven't directly decided to invest in the department store.

"It's got pros and cons," Mr Williamson told the ABC.

Premier has enjoyed a strong year on the Australian share market so far, up more than 20 per cent on the ASX, after announcing in March it planned to spin-off both its Peter Alexander and Smiggle brands.

After releasing its global retail sales forecasts on Monday, Premier's share price fell as much as 8 per cent on opening.

It clawed back some of the losses by midday.

Australia's retail sector has generally been under pressure as consumers have cut back on discretionary spending during a cost of living crisis.

Analysts have previously told the ABC that consumers are more concerned about paying their bills and putting food on the table, "not necessarily buying a new outfit for spring".

Last month, Deloitte Access Economics' Retail Forecasts showed that Australia's retail sector has effectively been in recession for the last 18 months.

Data from ASIC shows 768 retail businesses entered administration in the 2023-2024 financial year, compared to 540 businesses during the same period in 2022-2023.