Lew steps up attack on Myer’s Hounsell
Retail veteran Solomon Lew has ramped up his personal attacks on Myer’s executive chairman Garry Hounsell as he strives to oust the company’s entire board.
Last week Mr Hounsell was reported in media outlets describing himself as “old-fashioned” and admitting he had not used the internet to shop.
In a letter sent to Myer shareholders on Monday, Mr Lew picked up on the comments to attack Mr Hounsell.
“He also couldn’t properly explain how Myer’s debt covenants worked,” Mr Lew said.
“If this out-of-touch incompetence wasn’t causing all Myer shareholders significant value destruction, it would be comical.”
Mr Hounsell has been Myer’s chairman since October and was appointed executive chairman on Wednesday last week after the board pushed Richard Umbers to resign as chief executive.
Mr Lew, Myer’s largest shareholder through Premier Investment’s 10.8 per cent stake in the company, said he is moving closer to holding an extraordinary general meeting to oust the board.
In coming weeks, Mr Lew said Premier will lobby other institutional shareholders to construct a new board for Myer with a majority of independent directors.
“If we receive sufficient support from the institutional investors, this new board will then be put to all Myer shareholders for voting as part of the EGM,” he said.
“If the support we receive from the institutional investors is strong enough, we may not even need to hold an EGM to force the resignation of the current directors, but let’s wait and see.”
He said Premier will pay for the costs of the meeting.
Mr Lew repeated his previous comment that Myer is in “genuine peril” after a further sales decline in the peak Christmas period and in January.
He called the numbers “disastrous” numbers and said he was opposed to the New Myer turnaround strategy formed under Mr Umber’s leadership, which, despite showing no signs of a recovery, is the strategy Mr Hounsell wants to maintain.
Shares in Myer fell 5.5 per cent to a new low of 52 cents on Monday, leaving the stock sharply lower than the $1.25 it was trading at this time a year ago.
The company’s shares have been hurt by two profit downgrades in two months amid an ongoing sales decline as department stores struggle against weak consumer spending and increased competition from online and international specialty retailers.