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Twenty-two years ago, shareholders ejected Solomon Lew from the board of Coles Myer. Revenge will be both sweet and profitable for Australia’s billionaire rag trader after he cemented a merger deal on Tuesday that will make him the department store’s largest shareholder.
His pursuit of Myer has been lengthy as it has been dogged. It has been aggressive and has eviscerated the careers of many who fought it. But there has always been an inevitability that Lew would prevail.
As an empire builder in the retail industry, Lew has no peer. Nor is there another investor with his patience and tenacity or who drives a harder deal than Lew, even in his 80th year.
No one drives a harder deal than Solomon Lew, chairman of Premier Investments.Credit: Eamon Gallagher
Myer will be transformed into a $1 billion retail empire, in which Lew will have a 27 per cent personal holding. Alongside this, he will have a 40 per cent stake in Premier Investments, which owns the higher-growth and sexier brands Smiggle and Peter Alexander and is capitalised at $5.5 billion.
All this against the backdrop of one of the weakest retail environments in recent history, with the failed carcasses of businesses littered around Australia. Only this week, the company that owns Rivers, Katies and Millers lapsed into administration.
What Lew and his newest partner, former Qantas loyalty boss and now executive chair of Myer Olivia Wirth, will embark on represents a retail experiment – the marriage of a department store, Myer, with a string of lower-end apparel brand chains such as Just Jeans, Dotti, Portmans, Jay Jays and Jacqui E. These brands are owned by Lew’s listed retail company, Premier Investments.
‘Myer will have a future, and a Sol.’
Solomon Lew
Sure, these brands could be fairly described as mature and without a large sales growth upside, but they operate with a large dollop of Lew’s secret retail sauce – a vertically integrated model that produces the kind of retail margins that many competitors only dream about.
The pitch for this merger is for Myer to absorb some of that know-how and broaden its product base to introduce more of its own private brands – and, of course, to introduce a Lew-approved brand of management.