PMV - Premier Investments

[System]

Premier Investments Limited (PMV) is an investment company designed to maximise growth in capital returns to shareholders through the acquisition of controlling or strategic shareholdings in Australian companies with a particular concentration on the areas of retailing, importing and distributing.

http://www.premierinvestments.com.au

 

[Ves]

Results out today. EBIT margin back over 10% and online sales & Smiggle seem to be tracking really well. Their Australian operations do not look as bad as many would have predicted either.

I regret not buying at lower levels, but I took the conservative route and waited for the results. I am not sure if there is a lesson to be learnt about that. Waiting on the sidelines for now, I am undecided if the price has the right amount of risk / reward at these levels.

 

[McLovin]

Nice result. Smiggle and Peter Alexander are pretty exciting, IMO. I had a feeling this price jump would occur when the results came out, glad I got in before!

It was actually when I was having a look at BRG that I "discovered" PMV...

 

[skc]

Nice result. Smiggle and Peter Alexander are pretty exciting, IMO. I had a feeling this price jump would occur when the results came out, glad I got in before!

It was actually when I was having a look at BRG that I "discovered" PMV...

Smiggle is perfect for Asia. Women there from 8 to 38 love cute overpriced stationaries.

You have to give it to Sol Lew and Mark McInnes. Some people are just more nimble and creative when it comes to innovation and developing new market segments.

 

[McLovin]

Smiggle is perfect for Asia. Women there from 8 to 38 love cute overpriced stationaries.

And, amazingly, the market is apparently not highly competitive.

 

[Ves]

And, amazingly, the market is apparently not highly competitive.

I was also surprised by this too. SKC is not wrong about the target market, and that sort of thing is much in demand iamongst Asian adolescents especially from the "skuttlebutt" I have done at local shopping centres.

I also like the fact that they are trying to increase their online sales channel, and it actually seems to be gaining momentum if the early results are anything to go on.

 

[craft]

PMV investing in a successful franchise

http://www.asx.com.au/asxpdf/20121130/pdf/42bmkg2g0d0f66.pdf

Sol Lew was certainly swinging at the Gov’t LVT policy at the AGM this year – He does have a point.

No Australian online business is capable of reaching its full potential while a flawed twotiered
tax system remains in place.

 

[Ves]

Sol Lew was certainly swinging at the Gov’t LVT policy at the AGM this year – He does have a point.

I thought his address and underlying message was fantastic. He certainly is a straight-shooter.

 

[JTLP]

PMV investing in a successful franchise

http://www.asx.com.au/asxpdf/20121130/pdf/42bmkg2g0d0f66.pdf

Sol Lew was certainly swinging at the Gov’t LVT policy at the AGM this year – He does have a point.

I'm sorry but Solomon Lew is an absolute goose.

I love how everybody was chirpy when the Australian dollar couldn't buy a thread of fabric from overseas - and they were happy charging $100 for a t-shirt that costs $1 to make in China. We got ripped so badly for so long that I quite enjoy watching these overpriced retailers squirm and go under.

Apologies if you work in the retail industry - but if I were you I'd do 1 of 2 things:
A) Look for a new job in a hurry
B) Tell your boss/product manager to start being smarter with their costs or they can say bye bye.

End rant.

 

[Ves]

I quite enjoy watching these overpriced retailers squirm and go under.

Wrong thread, I take it?

 

[prawn_86]

I thought his address and underlying message was fantastic. He certainly is a straight-shooter.

Sol Lew was certainly swinging at the Gov’t LVT policy at the AGM this year – He does have a point.

If it was just a matter of 10% then im sure most people would still shop in Aus stores. Intersting to note that well over 50% of all online sales are from Australian websites. Personally when i shop on ebay i prefer to buy from an Aussie ebay store than an overseas one. But i would much rather by from an ebay store with no service than a physical retail store with no service

Retailers like Lew and Harvey just love whinging because their glory days are gone and they cannot adapt, they would rather just complain.

If they really wanted to do something they would improve their customer service and/or negotiate lower rents, costs etc.

I'm with JTLP on this one

 

[craft]

I'm sorry but Solomon Lew is an absolute goose.

I sense you don’t like the messenger – not sure that you have got Lew pegged correctly but that's just my opinion and unimportant in relation to the message.

I love how everybody was chirpy when the Australian dollar couldn't buy a thread of fabric from overseas - and they were happy charging $100 for a t-shirt that costs $1 to make in China. We got ripped so badly for so long that I quite enjoy watching these overpriced retailers squirm and go under.

Apologies if you work in the retail industry - but if I were you I'd do 1 of 2 things:
A) Look for a new job in a hurry.

Yep - there's plenty of stuff in OZ for you to go and dig up. (for now)

B) Tell your boss/product manager to start being smarter with their costs or they can say bye bye.

The tax regeigm is part of the cost base.

Not sure how any entrepreneur can build an online global scale retail business to offset the traditional retail jobs lost in Aus until a more level tax regime exists.

 

[McLovin]

The whole GST debate seems like a lot of hot air to me. In the US if you buy something in another state you are supposed to pay the sales tax to your own state government, of course this never happens. The funny thing is that retailers there are not complaining that they are missing out on revenue.

Having a locally based fulfillment site puts you at a big advantage, IMO. PMV will deliver within 3-5 days for free, and for $9.95 they'll do it next day. Their websites look good and they make it easy to get in touch with them if you have a question. There's more to buying online than just saving 10%.

I've got some friends who started a website from scratch and are now selling almost $100m/year. They're not usually the cheapest but they offer great customer service and so people come back to them time and time again. IMO, you fundamentally misunderstand why people are using the internet to shop if you think it's solely driven by price.

 

[craft]

The whole GST debate seems like a lot of hot air to me. In the US if you buy something in another state you are supposed to pay the sales tax to your own state government, of course this never happens. The funny thing is that retailers there are not complaining that they are missing out on revenue.

Having a locally based fulfillment site puts you at a big advantage, IMO. PMV will deliver within 3-5 days for free, and for $9.95 they'll do it next day. Their websites look good and they make it easy to get in touch with them if you have a question. There's more to buying online than just saving 10%.

I've got some friends who started a website from scratch and are now selling almost $100m/year. They're not usually the cheapest but they offer great customer service and so people come back to them time and time again. IMO, you fundamentally misunderstand why people are using the internet to shop if you think it's solely driven by price.

The internet has enabled innovation and broken down barriers to entry in many good ways for aspiring retailers. However I still think the tax point is relevant to price sensitive type retail. Just look at books for example – Book Depository – free delivery on even 1 book, and they’re here in a few days. How are you even meant to start competing with that if not on a level playing field. Some product is just suited to a lowest cost model and that seems to be all migrating to international sites.

Additionally attack is probably the only form of defence here – If PMV has got international online aspirations for their brands, then tidying up the backyard playing field is imperative in building a strong launch pad.

 

[McLovin]

The internet has enabled innovation and broken down barriers to entry in many good ways for aspiring retailers. However I still think the tax point is relevant to price sensitive type retail. Just look at books for example – Book Depository – free delivery on even 1 book, and they’re here in a few days. How are you even meant to start competing with that if not on a level playing field. Some product is just suited to a lowest cost model and that seems to be all migrating to international sites.

IMO, any tax advantage they have is lost in fulfilment costs, hence my comment about being locally based. Amazon (which owns Book Depository), for example, has fulfilment costs that are ~10% of product sales revenue. Most of their revenue would come from their US operations and their European operations, in both regions they have fulfilment warehouses. I'd take a punt and say the cost of shipping to somewhere outside their specialised distribution area is >10%. They're price local suppliers out because of their scale and because they've targeted commodity type products like books.

PMV control their own product, which puts them at an advantage. I also think McInnes learnt his lesson at DJS when he shut down their online presence in 2005. That sort of decision making tends to reflect the way much of retailing saw/sees the internet. They really don't seem to "get" it.

 

[McLovin]

They must have been reading this thread!

http://www.smh.com.au/business/jumb...ne-shops-target-australia-20121211-2b6vu.html

 

[prawn_86]

They must have been reading this thread!

http://www.smh.com.au/business/jumb...ne-shops-target-australia-20121211-2b6vu.html

Usually i take comments on mainstream news sites with a grain of salt, but its interesting to see that most people commenting on that article say they will continue to shop overseas if prices rise by the GST (10%). I am the same.

Usually if i can get somehting within 20% locally i will do that, otherwise i am happy to buy online (be it from an Aus or o/s store)

 

[JTLP]

The whole GST debate seems like a lot of hot air to me. In the US if you buy something in another state you are supposed to pay the sales tax to your own state government, of course this never happens. The funny thing is that retailers there are not complaining that they are missing out on revenue.

Having a locally based fulfillment site puts you at a big advantage, IMO. PMV will deliver within 3-5 days for free, and for $9.95 they'll do it next day. Their websites look good and they make it easy to get in touch with them if you have a question. There's more to buying online than just saving 10%.

I've got some friends who started a website from scratch and are now selling almost $100m/year. They're not usually the cheapest but they offer great customer service and so people come back to them time and time again. IMO, you fundamentally misunderstand why people are using the internet to shop if you think it's solely driven by price.

Many factors go in to a successful company - I agree - with service being a major part. However; if I don't have to deal with some 20 year old store assistant asking me "what's rocking on the weekend" and making the worst small talk imaginable + it saves me a few bucks but the service may be a little slower - I'll still do it.

TBH I think a lot of retailers don't have the right mix when it comes to sales - if you sat down and did a full 6P analysis on many of them (I'm targetting clothing here) you would find a lot of them lack in the 'price' and 'proposition' departments

 

[McLovin]

Many factors go in to a successful company - I agree - with service being a major part. However; if I don't have to deal with some 20 year old store assistant asking me "what's rocking on the weekend" and making the worst small talk imaginable + it saves me a few bucks but the service may be a little slower - I'll still do it.

TBH I think a lot of retailers don't have the right mix when it comes to sales - if you sat down and did a full 6P analysis on many of them (I'm targetting clothing here) you would find a lot of them lack in the 'price' and 'proposition' departments

I'm not saying that price is irrelevant, it's just that Australian retailers seem to view price as the only reason someone buys online (I bang on about this all the time but the HVN website is testament to that line of thinking). It's basically the same sort of thinking that was around in 1999 "on the internet you can do everything cheaper but the customer experience is worse". Or that the only people who shop online are cheapskates looking to buy things at half price.

They spend so much time discussing the tax issue but 10% is really not, IMO, the central reason why people shop overseas.

 

[JTLP]

I'm not saying that price is irrelevant, it's just that Australian retailers seem to view price as the only reason someone buys online (I bang on about this all the time but the HVN website is testament to that line of thinking). It's basically the same sort of thinking that was around in 1999 "on the internet you can do everything cheaper but the customer experience is worse". Or that the only people who shop online are cheapskates looking to buy things at half price.

They spend so much time discussing the tax issue but 10% is really not, IMO, the central reason why people shop overseas.

Apologies if I've come across differently - I agree 100% with what you're saying above (especially the last sentence). Interestingly, Zara and TopShop are pretty much always busy for a bricks and mortars store - but this may be more about Australians loving the brands overseas and finally revelling in it in their homeland (plus you can't ship Zara direct)...