Solomon Lew plans to spin off Peter Alexander and Smiggle next year

Retail billionaire Solomon Lew has confirmed plans to spin off two major brands Peter Alexander and Smiggle from his public company Premier Investments next year, as part of a global expansion strategy.

Children’s stationery label Smiggle is expected to become a separately listed company by the end of January, while the demerger of pyjamas retailer Peter Alexander will also take place later next year.

Other legacy brands, including Just Jeans and Portmans, will remain inside the Premier Investments vehicle.

“The ongoing strategic review has identified that the potential demerger of Smiggle and Peter Alexander is likely to maximise and accelerate the growth opportunities for these two brands over time,” Lew said in a statement.

The Lew family will retain major shareholdings in Smiggle and Peter Alexander. However, the Australian Financial Review (AFR) said Lew will ensure that the next generation of management stars inside Premier are given their chance to shine.

Premier Investments posted net profit after tax of NZ$192.9 million for the first half of FY24, while EBIT reached $228.4 million, exceeding previous guidance.

This is the second-highest EBIT and sales result in the company’s history, which analysts say underscores its skills in playing its “macroeconomic cards”. During the past year, Premier shares have risen by more than 35 per cent.

Peter Alexander delivered another record sales of $304 million for the half, up 6.7 per cent year on year and up 92.8 per cent on ‘pre-Covid’ FY20. 

The brand has announced its plans to expand into the UK, with the first two stores and dedicated website launched before Christmas. Up to 10 new UK store opportunities were also identified in the short term.

Meanwhile, Smiggle’s global sales were down 3.6 per cent to $200 million, but remain the brand’s second best sales result following a surge in post-Covid spending. Management cited a challenging discretionary retail environment, with customers exposed to increased cost of living pressures in all global markets.

The retailer, with a well-established international presence in Asia and Europe, has identified more than 30 opportunities for new stores in existing markets.

The demerger of the two brands will be subject to further review and final board approval, as well as regulatory and shareholder approvals.

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