Investor analysts at Macquarie have weighed in on Peter Alexander’s retail and concession movements, calling the brand’s retail exit from the United Kingdom a positive, while sharing concerns with its return to Myer.
Premier Investment’s (ASX:PMV) decided to close all three of Peter Alexander’s stores in the United Kingdom, citing sustained difficult trading conditions and a negative outlook for the UK economy. The sleepwear brand will still service the region through online sales.
“Given record-low Gulf tourist visitation to the UK + VAT refund scheme policy changes, and expensive rents in PA's 3 UK locations, we think PMV's UK exit is appropriate,” Macquarie analysts shared in a note to investors.
The UK was the brand’s first major international venture, after scaling to around 140 stores across Australia and New Zealand.
In the same update to shareholders, PMV added it is still actively exploring international wholesale opportunities for Peter Alexander, leveraging Premier’s existing expertise via Smiggle, which has around 282 stores, with some of these run through partnerships.
Macquarie analysts shared they are “constructive” on this international wholesale exploration, alongside a traditional overseas rollout, noting that “single-digit store opening costs are relatively minor costs for PMV, given the strength of PMV's cash positioning, and relative to the potential upside to earnings from finding brand success in a new market.”
As for the Myer (ASX:MYR) return, where Peter Alexander is set to open 24 concessions across the department store’s portfolio, Macquarie analysts are less constructive, noting headwinds.
“PMV's long-standing relationship with MYR may assist in signing favourable terms of agreement on the % of Sales charged by MYR to PMV Retail for 24 Peter Alexander concessions from 4Q27e+ onwards,” the Macquarie note read.
“In our view, this change will be GM dilutionary, but EBIT margin expansionary.”
While Macquarie is forecasting a decent growth in revenue ahead, driven by these new concessions, the analysts added that the Myer business is facing significant headwinds, which they say suggest downside risk to foot traffic at its concessions. They pointed to Myer company data, which shows month-on-month sales in the second half swinging dramatically from a slip in April to a growth in May, and finishing June and July with stark slips.
The analysts also shared a belief that Peter Alexander is facing pressure from downtrading consumers and discounting competitors, pointing to the 10 per cent drop in Premier’s EBIT for FY26 (unaudited) and a 2 per cent slip in total sales. This will include Smiggle, which is arguably facing harsher headwinds than Peter Alexander.
Macquarie analysts believe the top and bottom line troubles were likely driven by sales weakness over April into Mother’s Day, amid fuel price disruption and tough consumer sentiment, as well as gross margin compression in Peter Alexander during the June and July promotional period.
Peter Alexander is also preparing to open five new stores in the first half of FY27, which could add to future revenue.
Despite all the issues, Macquarie shared that Premier should outperform in the retail market, and set a 12-month target price of $15.70. PMV is currently trading at just under $12.00. Smiggle's reset on product – set to launch next month – and its shift to focus on tweens should add to this, the analysts noted.
The company is set to share its full audited results in September, but Macquarie analysts believe colour would more likely come from PMV’s AGM in December, which could show Smiggle’s new product is performing well.
Further mergers or acquisitions, a $100 million buyback scheme and the company’s stake in Brevilles Group, could provide further catalysts, the analysts concluded.