Premier Faces Leadership Test as Smiggle Sales Decline Amid Retail Pressures
Premier Investments reported a 31.1% rise in net profit after tax for FY25, driven by strong sales growth at Peter Alexander and a strategic shift following the sale of its Apparel Brands to Myer.
- FY25 net profit after tax of $338.2 million, up 31.1%
- Peter Alexander achieves record sales of $548 million
- Smiggle sales decline 10.7% amid cost of living pressures
- Final fully franked dividend of 50 cents per share declared
- Premier maintains strong balance sheet with $1.17 billion Breville investment
Premier’s Strategic Transformation
Premier Investments has marked FY25 with a significant transformation, completing the sale of its five-brand Apparel Brands business to Myer in January 2025. This divestment has refocused Premier as a high-margin, two-brand retail group centred on Peter Alexander and Smiggle, alongside its substantial investments in Breville and property assets.
Chairman Solomon Lew highlighted the year as both challenging and exciting, noting that the company is now positioned to capitalise on future growth opportunities by concentrating on its iconic brands and international expansion.
Financial Performance and Dividend
Premier’s statutory net profit after tax rose 31.1% to $338.2 million, reflecting strong performance from continuing operations despite a 14.9% decline in profit before tax excluding significant items. The company declared a final fully franked dividend of 50 cents per share, continuing a five-year track record of rewarding shareholders with substantial cash dividends, franking credits, and an in-specie distribution of Myer shares valued at over $1 billion.
Brand Highlights – Peter Alexander and Smiggle
Peter Alexander delivered a record $548 million in sales, up 7.7% on the prior year, driven by strong growth across all product categories and channels. The brand expanded its footprint with six new stores and nine relocations or expansions, including a flagship store in Chadstone featuring an innovative design. The UK launch in late 2024 introduced three stores in prime London locations, with ongoing investment in marketing and tailored products to build momentum ahead of key trading periods.
Conversely, Smiggle faced a 10.7% sales decline amid global cost of living pressures, though the second half showed signs of improvement. The brand continues to innovate with collaborations and is preparing to launch a new loyalty program in early 2026. An international search for new leadership is underway to drive Smiggle’s growth in existing and new markets.
Robust Balance Sheet and Outlook
Premier’s balance sheet remains robust, with a $1.17 billion market value investment in Breville and $333 million in cash. The company also holds strategic property assets, supporting operational stability. Early FY26 trading shows continued momentum for Peter Alexander, with sales up 9.2% in the first six weeks, while Smiggle’s sales were affected by a shipping delay but are expected to recover.
Looking ahead, Premier is focused on leveraging its streamlined portfolio to maximise earnings growth, while navigating a volatile retail environment. The company’s emphasis on customer experience, loyalty programs, and international expansion will be key to sustaining its positive trajectory.
Bottom Line?
Premier’s pivot to a focused, high-margin retail model sets the stage for growth, but leadership changes and market volatility warrant close watch.
Questions in the middle?
- How will Smiggle’s new leadership influence its turnaround and international expansion?
- What impact will Peter Alexander’s UK launch have on long-term growth?
- How sustainable is Premier’s dividend policy amid ongoing retail market challenges?