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· Posted on
March 27, 2024

Peter Alexander and Smiggle fly the coop amid Premier Investments retail split

Premier Investments has announced that it's looking to spin off its stationary brand Smiggle and sleepwear brand Peter Alexander.

What's the key learning?

  • Premier Investments predicts that spinning off the two brands will maximise growth for both of them.
  • When two companies demerge, it allows the individual entities to focus on themselves.
  • Premier Investments wants to open Smiggle stores in Indonesia, while it wants to launch Peter Alexander in the UK.

👉 Background: Premier Investments is the owner of popular Aussie brands like Smiggle, Peter Alexander, JayJays, Dotti, and more. The company has been listed on the ASX since 1987 and is currently valued at over $5 billion.

👉 What happened: Premier Investments has announced that it's looking to spin off its stationary brand Smiggle and sleepwear brand Peter Alexander, and have them listed on the ASX as independent retailers.  

👉 What else: This news has seen Premier Investments' share price jump 4%. Premier Investments predicts that spinning off the two brands will maximise growth for both of them.

What's the key learning?

💡Sometimes, two parts are worth more than the whole. When two companies demerge, it allows the individual entities to focus on themselves.

💡Both Smiggle and Peter Alexander have plans to expand internationally, but in different markets. Premier Investments wants to open Smiggle stores in Indonesia, while it wants to launch Peter Alexander in the UK.

💡Because of the growth potential, demergers often get investors hyped. According to Goldman Sachs, Australian demerged entities on average outperform the market by over 18% in the first year after demerger.

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