What does retail billionaire Solomon Lew have in mind for Premier Investments’ growth engine, kiddie stationery outfit Smiggle?
Premier chairman Lew, who controls 42 per cent of the listed group and has a fortune last valued at $2.4 billion, is one of Australia’s sharpest retail strategists. When he makes a move we sit up and take notice.
Smiggle is part of Premier’s wholly owned Just Group and is this year set to become Premier’s most profitable brand, accounting for 31 per cent of group earnings. UBS predicts Smiggle will generate half of group profit in five years.
In recent weeks, Lew and his Premier chief executive Mark McInnes have moved to reflect the importance of Smiggle to their organisation, creating a new corporate vehicle called Smiggle Group Holdings.
The new vehicle boasts heavyweight directors including Lew himself, McInnes, Premier director and Arnold Bloch Leibler managing partner Henry Lanzer, Smiggle boss John Cheston and Just Group CFO John Bryce as secretary.
McInnes believes Smiggle and its growth potential is what sets Premier apart from other retailers, many of which are struggling amid difficult retail conditions.
The franchise will open its first stores in Ireland before July and another 30-40 stores in Britain before Christmas. Just a few weeks ago Lew also established another new corporate vehicle, Smiggle International.
In the recent half, Smiggle’s sales rose 26.4 per cent to $135 million, with 33 new stores in Britain and Asia taking total stores to 272.
Almost 60 per cent of Smiggle’s sales now come from outside Australia, and British sales alone are expected to reach $200m by 2019.
So what is on the mind of Solly, whose superyacht Maridome was last spotted cruising off the Spanish coast?
In March, Premier raided the Myer share register to bag a 10.8 per cent stake of the group for $100m.
Premier also controls 25 per cent of the listed Breville Group, whose brands include Breville and Kambrook.
Could it be that Lew and McInnes might float off part of the burgeoning Smiggle enterprise via the new Smiggle Group Holdings, keep a controlling stake to continue to benefit from its growth story, and use the proceeds of an offer to help Premier fund a bid for Richard Umbers’ Myer?
It has a certain logic, although it sounds much too straightforward for the enigmatic Lew. Noisy neighbours
The hot market for prestige property over the past year has been kind to billionaire Solomon Lew’s retail lieutenant Mark McInnes.
The Premier Investments boss and wife Lisa Kelly have got out of jail on their ill-considered $9.25m buy in April last year of Sark, one of the better Toorak mansions on the prestigious Hopetoun Road.
Records show that the now Melbourne-based McInnes has managed to offload the historic pile for an impressive
$10.95m, a face value profit of $1.7m.
We reckon that would be more than enough to cover the couple’s 12-month holding costs, plus leave a little bit of net profit.
McInnes and Kelly had planned to extensively renovate the home for their young family, but then changed their minds when it became apparent how long and complicated the project would be.
That boss Solly could see right down their driveway from his own Toorak front gate might also have had something to do with the quick change of mind.
While a fresh home hunt continues, McInnes, who must have been kissed by angel, is for now making do with a rented faux chateau in adjacent Malvern, as well as the family’s holiday home in downtown Sorrento on the Mornington Peninsula. Unfinished business
Radhika and Pankaj Oswal have notched up another win Down Under.
And in a first for the flamboyant Indian couple, it’s one that endangers their previously well deserved reputation for beneficence towards Australian lawyers.
The Oswals have just received a court ordered payment by lawyers Lavan Legal. The Perth-based firm ran a case on behalf of sandgroping businessman Vikas Rambal (now the chairman of Perdaman Industries) that attempted to freeze the proceeds of the sale of the Oswals’ Perth mansion, “Taj on Swan”.
Lavan Legal’s case for a freezing order thoroughly unimpressed Federal Court justice Tony Pagone.
“The material relied upon in this case raises a question about how an application for a freezing order could responsibly have been commenced on Mr Rambal’s behalf,” wrote Pagone in his damning judgment in December.
And, all of six months later, we understand Lavan Legal has come through with the money.
The settling of that case, along with the settlement of their outstanding ATO bill, leaves the sale of the Oswals’ abandoned Peppermint Grove mansion as their only remaining business in Australia.
As we wrote last week, the Oswals are taking a characteristically fierce approach to that property negotiation, rejecting a
$19m offer.
The end of the Lavan affair also frees up time for the couple’s current legal project: suing Pankaj’s mother Aruna Oswal for his share in his late father Abhey Oswal’s billionaire empire. It’s never dull on Planet Oswal. McCann’s the man
A new era has begun at the Liberal Party’s think tank, the Menzies Research Centre.
Former Macquarie Group and Origin chairman Kevin McCann will be the next Menzies chairman. The Liberals will hope the appointment of McCann (and his network at the Millionaires Factory) helps the party chip away at what former son-of-Menzies Andrew Bragg has called their $200m “democratic deficit”.
Also joining McCann on the Menzies board are Tasmania’s Warwick Smith (the NSW chairman of ANZ and Kerry Stokes’s adviser) and Mitch Hooke (once the campaigning head of the Minerals Council now an ambassador for Bundy and Coke). The Liberals’ new federal president Nick Greiner will also take up his statutory spot on the Menzies board, replacing Richard Alston.
Not bad additions to oversee executive director Nick Cater’s research program and help nudge along fellow board member Tony Shepherd’s ongoing review of Australia’s economic challenges.
McCann’s appointment comes after former Menzies chairman Tom Harley’s 13-year reign ended a few months ago. Moving on
Speaking of Tom Harley, word is his advisory shop Dragoman is leaving Melbourne’s Tower of Power, 101 Collins Street.
Harley — great grandson of Liberal grandee Alfred Deakin — took control of the business in May, as he parted ways with former Dragoman John Fast.
We gather Dragoman will set off to a bigger space and leave behind the hallowed spot they sublease from former ANZ chairman Charles Goode’s Flagstaff Partners (which, incidentally, is not the aforementioned Oswals’ favourite investment bank).
And moving in Harley’s place? We hear it will be none other than fellow Liberals Peter Costello, Jonathan Epstein and David Gazard and the crew at their boutique ECG, relocating from the only slightly less powerful tower across the road.
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