Myer Holdings Ltd (ASX: MYR) is one of Australia’s leading department store chains, offering a wide range of products, including clothing, footwear, accessories, cosmetics, homewares, furniture, electrical appliances, and more. Founded in 1900 by Sidney Myer and his brother Elcon in Bendigo, the company now operates over 56 stores across Australia, China, and Hong Kong, as well as through its e-commerce site, myer.com.au. Renowned for its quality, service, and value, Myer continues to provide a diverse range of products, including beauty services, click-and-collect, and exclusive Myer One membership benefits.
Myer’s Landmark Acquisition: A New Era of Growth
In a significant move that marks one of the most important milestones in the department store’s 124-year history, Myer Holdings Ltd has completed its acquisition of the clothing division of Premier Investments. This deal, which sees Myer absorb Apparel Brands —including popular labels such as Just Jeans, Jay Jays, Portmans, Dotti, and Jacqui E — represents a major shift in the Australian retail landscape, positioning Myer as a more dominant player in both the Australian and New Zealand markets.
The merger will significantly expand Myer’s retail footprint, with the combined entity now boasting 783 stores across Australia and New Zealand. This expansion is a major achievement for the retailer, increasing its presence in the highly competitive market. The addition of Apparel Brands also means Myer now operates over 17,000 staff across its network, further solidifying its position as a key employer in the retail sector.
Premier Investments’ apparel division has long been a major force in the Australian retail industry, and now under the Myer umbrella, the merged entity will offer a more diverse range of products, broadening the retailer’s appeal to a wider audience. Myer’s CEO, Olivia Wirth, described the merger as “compelling,” stating that it brings together two highly complementary businesses, creating a retail powerhouse that will be well-positioned to thrive in an evolving retail environment.
While Myer has long been known for its stronghold in the department store sector, the merger with Premier’s apparel brands represents a diversification strategy, enhancing its product offerings and giving it access to more established, high-traffic apparel-focused stores. This move also expands Myer’s reach to younger consumers who are familiar with the popular fashion labels, allowing the department store chain to capture a larger portion of the market.
Financial Performance and Outlook
From a financial perspective, the merger is expected to deliver significant benefits, with the combined entity forecasting annual sales of over $4 billion. This includes Myer’s current $3.3 billion in annual sales, combined with the sales generated by Premier’s Apparel Brands business, which has been a major contributor to Premier Investments’ overall financial performance.
Premier’s apparel division has consistently delivered higher earnings than Myer on a smaller portion of sales, which presents a strong opportunity for Myer to improve its profit margins. The focus, according to Premier Investments’ billionaire owner Solomon Lew, is not just on sales growth but on improving profitability. He believes that with the addition of Apparel Brands, Myer can achieve substantial earnings growth, potentially growing the business to $5 billion in turnover over the next three years.
The deal also offers substantial operational efficiencies, with a larger retail network and more streamlined operations. With the integration of Apparel Brands, Myer can drive economies of scale and improve purchasing power, leading to better margins and a more robust financial position. Additionally, the deal positions Myer to benefit from Premier
Investments’ established retail operations, including its well-managed supply chain and strong customer base, which can help drive growth in the medium to long term.
Shareholder Support and Strategic Approval
The merger was overwhelmingly supported by shareholders from both companies, with 95% of Myer shareholders voting in favour of the deal, and a remarkable 99.8% approval from Premier’s shareholders. This strong backing reflects confidence in the strategic direction that Myer is taking, with many seeing the merger as a necessary step to secure the company’s future in an increasingly competitive market.
Solomon Lew, who has long advocated for a merger of the two companies, expressed his optimism about the future prospects of the combined entity. He believes that the merger creates a powerful retail platform, capable of capitalising on both physical and digital channels to drive future growth. Lew’s reappointment to Myer’s board as part of the deal further strengthens the link between the two companies, and his business acumen will likely play a significant role in guiding the merged entity towards sustained success.