Solomon Lew blames economy, cost-of-living crunch for Smiggle’s sluggish sales

Premier Investments’ billionaire chair Solomon Lew has taken a swipe at the Federal Government’s handling of the cost-of-living crisis, which he says has hurt the performance of kids stationery juggernaut Smiggle.

Smiggle has been without a permanent CEO for over a year after Premier dumped John Cheston amid allegations of serious misconduct.

The brand is also facing growing competition from online giants Amazon, Shein and Temu, and local retailers like Kmart, Target and Officeworks.

“(Smiggle) hasn’t gone as well as it should have,” Mr Lew told reporters following Premier’s annual general meeting on Friday.

“A big part of it is, of course, the economy . . . a big part of our business is in the United Kingdom and Australia, followed by New Zealand, and they’ve all been very tough markets.”

Mr Lew said Australia had “huge issues” in relation to the economy and cost-of-living, and that “the Government has got a lot of work to do to get Australia back on track”.

“It’s a very interesting time . . . and obviously the consumers have issues. You only have to look at what’s taking place with people not paying their electricity bills in NSW and other States and having to apply for extended terms,” he said.

“I can’t recall this in all my years in business ever seeing a situation like this previously.”

Premier expects its retail arm — which also includes sleepwear brand Peter Alexander — to report underlying earnings of about $120 million in the first half of the 2026 financial year, 18 per cent below consensus expectations.

Citi analyst Adrian Lemme said Friday’s guidance downgrade — which sent Premier shares plunging 15.9 per cent to $15.22 — was driven by Smiggle due to poor trading conditions in the UK and weak brand performance in Australia.

Despite a challenging global environment, Mr Lew told the meeting the Black Friday trading week showed encouraging early signs ahead of the all-important Christmas, Boxing Day and back-to-school periods. Peter Alexander delivered record sales over the period, he said.

“That said, we do not underestimate the significance of the December/January trading period ahead which is a critical driver for the group’s first half result,” Mr Lew said.

“The group is well prepared for this important trading period ahead.”

Those tuning in online were unable to listen to shareholder questions, with the live-stream cut off following the chair’s address.

Speaking to reporters, Mr Lew was more measured in his comments about Mr Cheston and the string of sensational allegations — including claims of former executives being drunk during work hours, bullying, sexual harassment and bribery — aired in September.

“I have nothing further to add to this issue at this time,” he said on Friday.

Mr Lew said the international search for Mr Cheston’s replacement was continuing. It announced Georgia Chewing as Smiggle interim chief operating officer, in addition to her ongoing e-commerce and marketing role within the group.

Premier also announced a share buyback of up to $100m following the sale of Apparel Brands — which include Jay Jays, Just Jeans, Dotti, Jacqui E and Portmans — to department store Myer this year.