Retail veteran Solomon Lew's Premier Investments has warned of "significant hardship" across its entire business and put the onus on landlords to come to the table as retailers struggle through the coronavirus crisis.
The apparel and stationery retailer reported a strong half-year result on Friday morning, with the company's net profit for the six months ending January 25 rising 12.2 per cent to $99.6 million.
Solomon Lew and Mark McInnes are putting the hard word on landlords over the coronavirus crisis.Credit:Paul Jeffers
Revenue for the half was up 7.6 per cent to $732.1 million, slightly ahead of analysts' expectations. Comparable sales across the company's brands, which include Just Jeans, Smiggle, Peter Alexander, Dotti and Jay Jays, were up 4.3 per cent.
All seven of the company's brands delivered positive comparable sales growth, with sleepwear outlet Peter Alexander posting an 11.1 per cent increase to sales, buoyed by "very strong" Christmas and January trade.
However, despite the positive half, Premier is set to be whacked by the same coronavirus troubles as the rest of the retail sector, with the company warning in its outlook trade in some of its markets had been "severely disrupted".
All brands operating in Australia and New Zealand had seen lower trade in tourist-skewed stores, and the retailer's UK and Ireland Smiggle stores have "deteriorated significantly" since the announcement of coronavirus as a global pandemic.
Premier's inventory sits 19 per cent higher than it did at this time last year, but the business warned much of its stock would be discounted to lure shoppers in store during the outbreak, which would hurt its gross margins for the half.
Landlords have "a major role to play" to ensure retailers can operate through the pandemic, the company said, noting it had already closed two stores since the outbreak of COVID-19 and would be prepared to close many more if landlords do not respond to the crisis.
Despite the incoming disruption to the business, Premier declared a dividend of 34 cents per share, fully franked, and payable on September 30. The company did not provide any guidance, saying it was currently "impossible to predict or forecast the nature and impact of COVID-19".
"During the reporting period, Premier traded through Brexit uncertainty in the United Kingdom, protests in Hong Kong, devastating bushfires in Australia and a continuing fall in the Australian dollar. These pressures claimed many other retail businesses across Australia and the globe," Mr Lew said.
"Despite these factors, Premier delivered record results – this is a testament to the strategy we put in place almost a decade ago and the relentless execution of management against that strategy."
"Premier today announces record sales and profit with exceptional cashflows allowing us to provide the Group with great flexibility in these uncertain times."
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