Bridget Carter in 'The Australian' Data Room states:
"Billionaire Solomon Lew is believed to be driving a merger between Myer’s apparel brands and his Premier Investments to gain savings on shopping centre rent, according to industry experts.
The move enables the astute retail operator to shut retail stores and relocate his brands within the department store chain’s property stable, which has leases with far longer durations.
Mr Lew already effectively controls Myer, with a 31 per cent holding in the department store chain.
The majority of his Premier Investments retail leases are short-term in duration, many with only about two years to run.
Overall, it has 1153 stores across six countries, but, excluding Peter Alexander and Smiggle — which would not be part of the latest merger deal — it would be about 715.
Now the understanding is, should the merger proceed, as expected, where Premier Investments investors receive payment for the business through Myer shares, Premier will not only close stores but relocate the Sass & Bide, Marcs and David Lawrence stores into stand-alone stores where Premier has leases and move other brands where Premier has stand-alone stores for brands, such as Dotti, into Myer.."
What's unstated is whether MYR will continue to find ways to reduce its leasing costs through occasional store closures, or footprint reductions.
(20min delay)