Solomon Lew has shown the rest of the downbeat retail sector how to bring home a bumper result in an environment awash in consumer pessimism, with his Premier Investments fashion group clinching double-digit profit gains and envious sales growth to push its shares to an all-time high.
The retail mogul, flush with $200 million added to his personal fortunes recently after selling his family's stake in Country Road, is also claiming bragging rights for a rare feat by an Australian retailer – a successful overseas expansion – with Premier's stationery chain Smiggle tipped to be profitable after only its first year in Britain.
"Smiggle is a global brand and in time it will be expanded into more countries," Mr Lew told BusinessDay.
And a launch into the mighty US market is on the radar.
"It will have to be economically viable ... as you can see, the UK will be profitable in the first year and how many businesses can establish [overseas] anywhere, build stores and have a cost infrastructure and still make a profit in the first year?"
His optimism around Smiggle and the earnings trajectory of Premier, which owns a stable of fashion brands such as Portmans, dotti, Peter Alexander and Just Jeans, was matched by investors yesterday as Premier shares rocketed nearly 9 per cent to a record high of $10.70 after the retail group unveiled underlying earnings before interest and tax had risen a healthy 10.9 per cent to $92.8 million for the 12 months to July 26.
Reported profit of $73 million was up slightly from the $69.3 million posted in fiscal 2013, which included a $105.2 million one-off gain from its stake in listed appliances group Breville.
Fuelling Premier's earnings party was sales growth of 6.2 per cent with like-for-like sales up 4.7 per cent. All seven fashion brands in the portfolio achieved same-store sales growth in the second half – the first time all divisions had fired at once since chief executive Mark McInnes took the reins three years ago.
Premier, which is 43 per cent owned by Mr Lew's Century Plaza, ended trading up 77 cents (7.833 per cent) at $10.60. The all-time high share price gives it a market capitalisation of $1.65 billion, easily dwarfing department store Myer, valued at $1.17 billion. Mr Lew and Premier are constantly cited as being possible buyers of Myer.
Smiggle will drive growth in the year ahead, with eight stores now open in Britain after its launch in February, with a further 10 sites planned to open before Christmas and 25 to 30 stores up and running by the end of fiscal 2015.
Premier declared a final dividend of 20 cents a share, up from 19 cents paid last year, taking the full-year payout to 40 cents a share against 38 cents paid to shareholders in 2013.
