Premier Investments, which owns the Just Jeans, Peter Alexander, and Smiggle chains, is planning to exit four sites in Sydney’s MidCity.
For the 26 weeks ended January 29, the company’s sales are expected to be about $769 million, up 0.5 per cent on the year-ago period. It maintained its earnings guidance for the year.
Premier shares rose 2.1 per cent on Thursday after the company’s sales and earnings guidance were maintained.
Premier investments are pleased with the sales performance due to the government’s forced store closures in Melbourne and Sydney.
The company plans to exit four stores in the mall, which includes the Peter Alexander, Smiggle, and Just Jeans brands.
The closures were part of the company’s plan to exit from poorly-priced stores that are no longer considered important to the company.
Last year, Fortius Funds Management, which owns the mall, took legal action against Premier over unpaid rent.
Solomon Lew, the company’s major shareholder, has been a vocal advocate for sales-based rents.
Sentinel Property Group said Premier Investments should stop complaining about unrealistic rent increases. Instead, it should be focusing on making money instead of complaining about the rent.
The landlord was the first to feel the impact of a poorly performing store, even if it was due to factors such as the economy or competition.
The turnover rental agreements with Premier were always capped at the upside and did not consider the revenue from online sales.
Although they understood the concept of variable rents, Sentinel Property Group said that retailers were not going to be able to afford the higher rent when a business boom happened.
Premier is expecting its earnings before interest and tax to increase by about 4.3 per cent to 5.3 per cent in the 26 weeks to January 29.
Credit Suisse, which has an “outperform” rating on the stock, said Premier’s cost-control efforts had helped boost its results.
The company said that its Smiggle business had recovered globally, while the Peter Alexander sleepwear division had also performed well.
Premier is also reviewing its operations in Australia and New Zealand to see how it can best adapt to the changing shopping habits caused by the pandemic.
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