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Premier Investments closes Smiggle and other stores, impacting 9,000 employees

The Premier Investments Limited (ASX: PMV) share price is storming higher on Thursday despite the release of a disappointing announcement.

At the time of writing the retail conglomerate’s shares are up over 5% to $10.82.

What did Premier Investments announce?

Premier Investments has become the latest company to stand down its employees in response to the escalating COVID-19 outbreak.

This follows moves by Accent Group Ltd (ASX: AX1), Lovisa Holdings Ltd (ASX: LOV), and Mosaic Brands Ltd (ASX: MOZ) this week.

The company explained: “As a result of the escalating COVID-19 outbreak, the Australian Government and the various Australian State Governments have requested that everyone stay at home other than in certain limited circumstances.”

“Premier Investments Limited supports the position of the Prime Minister, the State Premiers and Chief Medical Officers that all Australians must do everything they can to stop the spread of COVID-19, including the various protective measures issued by the National Cabinet. These extraordinary steps have been deemed necessary by governments to limit the spread and minimise the impact of the pandemic,” it added.

When is Premier Investments closing stores?

Premier Investments will temporarily close all retail stores in Australia from 6pm (local time) on March 26 until 9am (local time) on April 22.

This follows similar decisions the company has been forced to take in New Zealand, the United Kingdom, and Republic of Ireland. Globally these closures will impact over 9,000 of its employees.

Premier Retail CEO, Mark McInnes, has voluntarily decided to work from home without pay or any other entitlements for the period of the shutdown. In addition to this, the entire Just Group executive team have been stood down and have agreed to work from home when required with either no pay or reduced leave entitlements.

Rent update.

The company advised that in Australia and New Zealand upwards of 70% of its stores are already in holdover or with leases expiring in 2020. This provides the company with maximum flexibility.

In addition to this, these extraordinary circumstances mean Premier Investments intends to pay no rent globally for the duration of the shutdown.

Finally, the company will continue to monitor the advice and requirements of the governments in the relevant jurisdictions where it operates. It will provide further updates when new information becomes available but no later than April 21.

If you’ve been impacted by store closures, here are some options that you have for financial support during these difficult times.

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Motley Fool contributor James Mickleboro has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Premier Investments Limited. The Motley Fool Australia has recommended Accent Group. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Scott Phillips.

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