SALES season has come early at Myer, with the department store chain unveiling an ambitious plan to acquire clothing brands Just Jeans, Jay Jays, Portmans, Jacqui E and Dotti.
The non-binding, indicative and conditional offer for Premier Investments’ Apparel Brands, announced this week, would result in Myer taking full ownership of the labels in exchange for new shares in Myer to Premier shareholders.
The purchase, if accepted by Premier, would be a massive boost to Myer’s earnings.
Apparel Brands is forecast to rake in $130 million in profit in the next financial year, while Myer’s profit for calendar year 2023 was $88 million, says E&P Capital retail analyst Phillip Kimber.
Premier and Myer agreed to conduct mutual due diligence and discuss purchase terms.
The announcement was greeted with cheers by investors, with Myer soaring 17 per cent to 75.5 cents in morning trading. Premier climbed a more modest 3.5 per cent.
“There would be some buying synergies by combining Myer’s private label purchases with Premier’s Apparel Brand purchases as well as other non-product procurement,” Mr Kimber said.
It comes after Premier Investments announced a strategic review into its businesses, which flagging it would consider spinning-off several brands.
Myer says it sees “significant opportunity” from combining the businesses and has commenced a review of its own strategic direction.
“While Myer has one of Australia’s strongest retail brands, store networks and loyalty programs, there is a significant opportunity to reinvest in our product offering, customer engagement capabilities and further optimise our supply chain to achieve our full potential,” said Myer executive chairwoman Olivia Wirth.
