Premier Investments to demerge stationery brand Smiggle, mulls same for sleepwear brand Peter Alexander

Retail giant Premier Investments plans to demerge its children’s stationery business Smiggle to be a standalone business by the start of next year and is exploring the same prospect for sleepwear brand Peter Alexander.

The Solomon Lew-chaired group says growth opportunities for the two brands are expected to be greater as standalone businesses, a prospect first flagged in August last year.

The retail group, which counts Just Jeans, Dotti, Jacqui-E, Jay Jays and Portmans in its portfolio, on Tuesday said Smiggle had experienced its second-best sales ever in the six months to January 27.

The company has used a strategic review to examine all of its businesses, which is ongoing. That process has also found more than 30 opportunities for new stores “in the near term in existing markets” for Smiggle, as well as further options for new offshore markets.

It said work to push Smiggle towards becoming a separate listed entity by the end of January next year was in train, while the same option for Peter Alexander, at some point during next year, is being explored.

Peter Alexander, a dominant player in sleepwear, is expected to launch into the UK before Christmas this year, while another 20-plus locations have been identified for new stores. A dedicated UK website and two stores will be opened but opportunities for up to 10 have been identified for the British launch.

“There’s nothing like Peter Alexander in the UK,” Mr Lew said.

“We see that there is huge opportunity . . . and I’m sure that after a period of time we’ll be as successful as we are here.”

Premier said Peter Alexander sales had grown 92.8 per cent between the first half of the 2020 financial year and the same period in 2024.

In the most recent period, sales jumped 6.7 per cent year-on-year to $279.3 million — a record level.

Mr Lew emphasised Peter Alexander was “not just pyjamas” and talked up its leisure wear offering, footwear and unique fabrics.

“And it’s fashionable, and so, you know, when I get home, I take my suit off and I get into my Peter Alexander leisurewear, not into my Peter Alexander pyjamas,” he said.

Overall, Premier reported profit of $177.2m in the first half, up 1.65 per cent on a year prior.

Pre-tax earnings of $209.8m were down 4.8 per cent on a year prior.

Premier also has a 25.5 per cent investment in listed appliances manufacturer Breville and a 28.4 per cent investment in department store Myer, making it the largest shareholder.

Despite the pressures from a higher cost-of-living environment, Premier reported its second-highest sales result ever, at $879.5m — down 2.8 per cent on a year prior, which was its highest result.

Mr Lew called on the Federal Government to urgently address cost-of-living pressures, particularly on energy ahead of winter, and to cut the fuel excise.

“The February CPI increase brings the tax to almost 50¢/l and on top of that we’ve got a further 10 per cent of GST,” he said. “The link to six-monthly CPI increases only absolves any government from decisions appropriate to the economic environment and particularly other cost-of-living pressures, so the government needs to do more.”

Peter Alexander’s sales jump in that period bucked the trend compared to the rest of the portfolio, with Smiggle sales down 3.6 per cent (attributed to a post-COVID bounced in 2023) and apparel brands down 8.1 per cent.

Earnings for the first half were nearly 5 per cent higher than expected on December 1, boosted by a record Boxing Day sales result.

Interim chief executive John Bryce said global sales for the first eight weeks of the second half were showing improving momentum and were back up in line with the prior comparable period.

“With customers facing increased cost-of-living pressures, Premier Retail’s strategy is anchored on delivering value for customers in our products and shopping experience, whilst also maintaining a relentless focus on inventory productivity and operational efficiencies,” he said.

Premier declared a 63¢ interim dividend.

“The board is optimistic about what the future holds for the group as it continues to explore ways to maximise shareholder value,” Mr Lew said.

Mr Lew also threw his support behind newly-appointed Myer executive chair Olivia Wirth, who he said came to the role with “a wealth of experience”.

“She’s a proven executive . . . Myer has excellent potential,” he said.

“It’s a $3.5 billion sales organisation . . . and obviously the problem with Myer is that it doesn’t make enough money, so if you look at Premier and how Premier is run and how much money they make on less than 50 per cent of the revenue, you’d realise the potential that she could bring to the company.”