Myer, which I’d argue has been in a slow structural decline for some time, is trying to revitalize its operations by acquiring Premier Investments' Apparel Brands segment, which includes Just Jeans, Jay Jays, Portmans, Dotti, and Jacqui-E.

The Apparel Brands collectively saw a 6.4% decline in sales for FY24 but remain well above pre-COVID levels. While they aren't in the same league as Smiggle or Peter Alexander in terms of performance, they are still relatively strong assets -- at least next to Myer's..

The Apparel Brands' EBIT margin stands at 9.7%, compared to Myer's 2.3%. So, while Myer has larger sales, its profitability seriously lags behind that of the Apparel Group.

As for Solomon Lew, although his personal stake in Myer will decrease slightly, he will remain the largest individual shareholder. The merger should create a stronger business overall, and Lew will also secure a seat on the board. And it leaves Premier with the best parts of its business.

My thumb suck based on the pro-forma numbers is that Myer is on a forward PE of (very) roughly 10. That's probably about right, but not nearly cheap enough for me.

Fairfax reports possible takeover by David Jones, but the South African company denied any such intention.

Article here

Though there is a chance this could be turned around, it requires a willingness to do so and the execution skills to do it well. 

Right-sizing the business, avoiding unnecessary capex, maximising future (perhaps ultimately declining) cash flows requires visionary leadership -- and i'm not sure that is likely.

With Solomon Lew in the mix, there is certainly hope, and I respect the bull case, but I think the risk-reward profile is not attractive.

Pennies in front of a steam roller...