Ragtrader founder Fraser McEwing shares his thoughts on the future of two recently acquired retailers.

I can’t get too excited about the prospects of the two companies recently snatched from the jaws of the liquidator.

It isn’t that Seafolly and Colette by Colette Hayman are unsound business models, but rather the doubtful management capability of those now working the gears.

Bernie Brookes has returned to the land of quagMyer, this time becoming a 90 percent shareholder and executive chairman of Colette by Colette Hayman, a high-profile fashion accessories retail chain that he bought out of administration.

He spent the previous two and a half years trying to make Edcon, the biggest South African non-food retailer work, but his degree of success was expressed last year when the board didn’t renew his contract.

The media also blamed him for mucking it up.

Back in Australia, Bernie has put his presumably substantial, variously collected funds into becoming an entrepreneur rather than an employee. But he hasn’t lost his attraction for bailing out companies.

The last time he did that was with Myer shareholder funds, $72 million to be precise, when he somehow talked the Myer board into buying sass & bide.

I wrote scathingly about that smelly deal at the time, but the financial media didn’t pick up on it – no doubt to the relief of Bernie and others.

Since then, Myer has carted this cadaver around so that attributable losses would by now dwarf the purchase price.

You might conclude that Bernie isn’t much of a retailer or, to be charitable, not a lucky one.

But if he’s the architect (rather than CEO John Skellern) I’d have to applaud his plan to hack off two thirds of Colette’s stores, especially these days when bricks & mortar is on the nose and online is in the ascendancy.

Another advantage that accessories have over other apparel is that they are a much better online proposition, with no fit problems and far fewer customer grizzles that can lead to returns.


It is doubtful whether Seafolly’s death and miraculous resurrection had as much to do with covid-19 as claimed. It looked more like a game of dominos where the players knew each other’s tiles.

First, Seafolly holds up the drowning arm and is helped aboard the temporary rescue boat of voluntary administration.

Then along chugs a permanent rescue boat, LVMH-backed L Catterton, Seafolly’s biggest creditor who also happens to be its 70 percent shareholder.

It is owed some $25 million by Seafolly but unselfishly does not line up with other creditors - who will now get more in the dollar.

Not only does Catterton enfold Seafolly into its family, but buys Jets, Seafolly’s major competitor. It also happens that Jets was in voluntary administration too, as part of the big PAS Group in the same nervous state.

There’s more.

L Catterton then appoints Brendan Santamaria as CEO of Seafolly. Where did Brendan come from? You’ve guessed it; from the position of CEO of Designworks, also part of the failed PAS Group.

Neat? You bet. Too neat.

Brendan no doubt has reasons why the PAS Group has failed – and probably protests that it had nothing to do with him.

It might have even dragged Designworks under, so we should give Brendan the benefit of the doubt, but you’d have to say he starts out at the Jets-enhanced Seafolly carrying a bit of baggage.

His task will be to solve the problem that has always beset swimwear specialists: what to do in winter?

That has been somewhat offset in recent times by the growth of ‘athleisure’ which Seafolly can make and sell all year.

But against that is the relative low cost of athleisure fabrics and garment manufacture, so there isn’t that much difference between designer and budget. In other words, everybody is into it.

While the two swimwear brands will benefit from being sold internationally, meaning that climatic opposites around the world will keep production ticking over, you still have the difficulty of local winter hibernation, especially if the company is running its own retail outlets.

You may remember the now extinct Australian swimwear label, Brian Rochford. It made big money in summer but lost it all – and more – in winter. Brian, a very talented marketer, is still around and maybe Brendan Santamaria should buy him a beer and have a chat.


Solly Lew has consulted his book of best negative superlatives to describe Myer’s latest financial report.

For several months prior, he had little to say about Myer to the media, and many thought that was because his Premier Investments’ Just Group was about to release some ugly numbers.

But that wasn’t the case; just the opposite, in fact.

Solly’s previous tirades about Myer’s performance have focused largely on board chairman, Garry Hounsell, but now CEO John King is getting a dose as well.

When the avuncular King arrived in 2018, Solly had a few meetings with him, probably trying to gauge where he might take Myer and helping him over the honeymoon ritual and into the marriage.

Premier has a big stake in Myer.

First, there is the share investment of around $100 million (or just over 10 percent of the company) intended as a money-making hurdle for a takeover that didn’t happen.

The value of those shares has now wilted by about $80 million, so part of Solly’s anger is at himself for coming unstuck with a share blocking strategy that’s worked beautifully before.

Then there is the risk of being a massive unsecured creditor if Myer went under.

Solly has hinted at this concern by announcing that he is turning down the wick on his supplies that encompass many different products.

To me, that says more about Myer’s prospects than one bad financial report.

Solly is one of Australia’s most astute businessmen, and he’d have a second to none appraisal of Myer’s future.

In the meantime, Myer puffs uphill under John King, battling the multiple threats of covid-19, throttling leases, declining foot traffic, while grabbing at straws like doing delivery deals with Amazon.

Myer’s main problem is the simple fact that it is a department store losing relevance in the retail mix.

And much as Solly might do his block at Myer he is yet to come up with a solution of how to fix it.

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