Peter Alexander defects to Myer

Sleepwear brand signs exclusive deal with Myer.

In a major coup for Myer (ASX: MYR), sleepwear label Peter Alexander has signed an exclusive deal with the retailer to start selling its women’s, men’s and children’s ranges in store starting in February. Owned by Solomon Lew’s Premier Investment Group (ASX:  PMV) (after it acquired Just Group in 2008), Peter Alexander is acknowledged as Australia’s most recognisable sleepwear brand and is expected to generator $10 million in sales for Myer in the first 12 months.

Under the deal, Peter Alexander will operate a shop-in-shop model for womenswear in 10 stores from February, and mens and childrens wear will be sold as stocked goods in 15 stores. Myer executive general manager of merchandise Adam Stapleton had been working with Peter Alexander general manager Judy Coomber in previous months over the deal, but denied that the deal had been done because Ms Coomber was previously in his position. “If you know Judy, she is a fantastic merchant,” he said. “She is doing what she thinks is best for Peter Alexander; that’s Judy to a tee. She obviously felt that Myer was the perfect fit for the brand and that the customers would respond.”

In response, Mr Stapleton’s equivalent at David Jones (ASX: DJS) noted that with the company’s renewed focus on selling space productivity, the proposed deal from Peter Alexander did not stack up financially.

Foolish takeaway

Myer’s share price has recovered strongly in the past 12 months, increasing by 62%, as analysts have indicated that a recovery for the sector is not too far away. A lift in consumer and business confidence coupled with a lift in house prices is considered to be enough to encourage greater consumer spending.

Myer and David Jones have attempted to strengthen the appeal of bricks and mortar stores by increasing the number of exclusive deals and private label brands. In recent times make-up brand Napoleon Perdis and swimwear label SeaFolly have signed exclusive deals with Myer, while David Jones has recently signed an agreement with Dick Smith.

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Motley Fool contributor Andrew Mudie does not own shares in any of the companies mentioned.

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