Influential analyst Macquarie is tipping a rebound for Solomon Lew’s Premier Investments amid strong demand for Peter Alexander and says the string of executive departures at Smiggle is less of an overhang for the group.
Shares in Premier jumped 9.9 per cent to $14.02 on Thursday. But it’s still a far cry from a high of nearly $30 at the end of 2024.
In a note to clients on Thursday, Macquarie said Premier’s trading updates and other economic data indicated strong demand for its sleepwear brand Peter Alexander and the apparel category more generally despite investor concerns around the impacts of potential interest rate hikes on consumer sentiment.
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The investment bank pointed to Premier’s update in December that revealed record sales for Peter Alexander over the Black Friday and Cyber Monday period.
Macquarie said its foot traffic data tracking 61 Peter Alexander stores in Australia, as well as Google data, not only corroborated strong sales in November but also indicated it accelerated into the all-important Christmas trading period.
Macquarie also addressed concerns around Peter Alexander’s entry into the UK.
It noted “tier-one” locations chosen by Premier for Peter Alexander’s first UK stores — inside two Westfields in London and Bluewater shopping centre in Kent — were high foot-traffic areas, “reducing the need for significant marketing or brand investments in the early stages of market investment”.
Meanwhile Premier’s children’s stationery brand Smiggle is struggling amid tough competition from online giants — like Amazon, Shein and Temu, and local retailers like Kmart, Target and Officeworks — and a scandal that has engulfed its management ranks.
Smiggle has been without a permanent chief executive for over a year after Premier dumped John Cheston amid allegations of serious misconduct, including claims of former executives being drunk during work hours, bullying, sexual harassment and bribery.
Mr Cheston has always denied the allegations against him.
His sacking in September 2024 came three months after he had been poached by rival billionaire retail magnate Brett Blundy to run global jewellery chain Lovisa.
Macquarie said the management turnover was an overhang for Smiggle, but less so for the group.
“Most leadership churn is isolated to Smiggle, which saw multiple executive departures over the past 18 months,” it said.
“Importantly, most key executive departures left to Lovisa, which is not a direct competitor of Smiggle, and as such, do not pose an ongoing competitive drag to Smiggle.”
Macquarie added that Mr Lew remained in his position as Premier chair and significantly aligned to shareholder outcomes. Mr Lew controls about 40 per cent of Premier’s shares.
Premier expects its retail arm — which houses Peter Alexander and Smiggle — to report underlying earnings of about $120 million in the first half of the 2026 financial year, 18 per cent below consensus expectations.
“(Smiggle) hasn’t gone as well as it should have,” Mr Lew told reporters following Premier’s annual general meeting in December.
“A big part of it is, of course, the economy . . . a big part of our business is in the UK and Australia, followed by New Zealand, and they’ve all been very tough markets.”
