Someone forgot to tell Solomon Lew about consumer spending cliff

Thus, in Premier’s case, the recognition of an uncertain macroeconomic environment contained in its written commentary on Monday, looked more like a standard caveat, rather than a warning that the retail party is about to end.

Lew confesses he is not an economist, but is hopeful we will soon start to see some daylight from the RBA on its interest rate agenda.

It is fair to say that Lew doesn’t sound nervous or despondent about the future. Rather than squirrelling away capital for lean times ahead, the company is spending. In September last year, it announced a $50 million buyback, and on Monday it splashed out with a regular and a bonus dividend.

Last month, it used the three per cent creep provisions of the Corporations Act to buy additional shares in department store group Myer – taking its stake to nearly 26 per cent.

Lew noted on Monday that Premier had an arsenal of cash (and almost no debt on its balance sheet) that it could apply to acquisitions.

The big question is whether Myer is in Lew’s sights. He could top up his current holding by three per cent again later this year, at which point he would have a near 29 per cent stake.

Premier has already missed the opportunity to get Myer on the cheap and history demonstrates Lew loathes paying full retail price for assets.

Premier is also looking to expand one of its most successful brands, Peter Alexander – adding locations and increasing the footprint of some stores, improving the facilitation of online for offshore customers, and hinting that overseas store expansion might also be on the cards.

Peter Alexander sales were up 15 per cent over the half and ahead 80 per cent on the same half in 2020.

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Where most of Premier’s apparel brands such as Jacqui E, Jay Jays and Dotti sit neatly into the “value” category, Peter Alexander is pitched at a much higher price point. And given the pyjama-wearing COVID isolation is behind us, this brand’s performance is quite a feat.

Its other marquee brand, Smiggle, which was hit during COVID, is now back on track and looking to increase its global store presence.

If we are about to hit a retail spending cliff, Lew is looking to catch other companies about to fall off and defy gravity as he does it.