Premier in global push for two growth brands
Premier Investments will invest heavily in its supply chain across three countries to give it the firepower it needs to transform its two high-growth businesses - stationery store Smiggle and sleepwear chain Peter Alexander - into global brands.
Double-digit growth harnessed by a planned push by Smiggle into Britain, complementing its successful entry into south-east Asia, will be accompanied by a similar ambitious expansion drive for Peter Alexander.
Premier still faces an uphill battle to turn around its struggling flagship retail businesses, Just Jeans and Jay Jays.
Chairman Solomon Lew announced Smiggle's expansion into Britain on Tuesday, saying it would start with five to eight stores in London.
Premier reported net profits of $174.5 million in the year to July 27, up from $68.3 million during the previous year.
The bottom line profit easily eclipsed the full-year profit of the nation's biggest department store, Myer, a retailer Mr Lew once oversaw when he was chairman of the Coles Myer conglomerate.
However, Premier's result included a one-off item of $105.2 million after tax reclassification, reflecting the company's 25 per cent equity investment in kitchen appliances maker Breville from early March.
Premier chief executive and former David Jones boss Mark McInnes, admitted the company's core brands were still mired in a protracted turnaround, made tougher by a lacklustre retail sector, but the group could at least boast two growth brands in Smiggle and Peter Alexander.
Smiggle posted a 14.5 per cent rise in sales for the year. Sales at Peter Alexander were up 17.7 per cent.
"We think there are very few listed retailers in the country that have brands capable of expansion as we do," Mr McInnes said.
Smiggle will open its first store in London in February. Premier views Britain as a major growth market with capacity for 200-plus stores over the next five years.
This follows a successful push into Singapore where it has 17 stores. Malaysia is also on the drawing board, but a planned expansion into Japan has been put on hold.
Premier's other brands, the core of its bulging fashion portfolio, are struggling in the challenging trading environment.
The Jay Jays youth fashion brand reported an 11.1 per cent drop in sales, while for Just Jeans it was 3.3 per cent and for Jacqui E 2.3 per cent.
Premier will revamp its supply chain and distribution system in Australia, New Zealand and Singapore to improve supply to its 800-plus stores, prepare for its offshore expansion and provide better service to its online customers.
The group declared a final dividend of 19¢ a share, up from 18¢ last year, to take the full-year payout to 38¢ per share.