Myer (ASX:MYR) share price rallies to 52-week high despite lockdowns

The embattled retailer’s shares are rallying today. We take a closer look

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The Myer Holdings Ltd (ASX: MYR) share price has rallied 15% in the past week, cruising to a 52-week high of 50 cents during trading today.

However, at the time of writing, Myer shares have retreated to 48 cents — 2% down on yesterday’s closing price.

The strength behind the Myer share price comes in the wake of the decision to extend lockdown in Sydney by at least another 14 days until 30 July.

Why the Myer share price is ignoring lockdown concerns

Myer shares have been resilient in the past few weeks. This is likely propped up by news on 6 July Solomon Lew had been accumulating Myer shares through his Premier Investments Limited (ASX: PMV).

It has been reported Lew has increased his substantial shareholding in Myer from 10% to more than 15%.

According to the Australian Financial Review, the rationale behind Lew’s interest is to “bring about change at the struggling retailer”.

Myer responded to Lew’s increased shareholding on 8 July. The company said it was “open to discussing appropriate board representation of Premier Investments through nomination to the Myer board.”

Despite this, Myer was reluctant to change the direction of its business strategy.

Myer’s acting chairman JoAnne Stephenson reiterated the business is performing well:

We have a well-articulated strategy in the Customer First Plan and it is delivering positive results, as seen at our 1H results despite the ongoing challenges that lockdowns and CBD traffic limitations present.

However, Premier Investments was ruthless with its reply, saying:

In Premier’s view, Myer’s three remaining non-executive directors should for once put its shareholders first and resign immediately. Any other action would be futile, and costly for Myer shareholders who have endured enough.

With both Myer and Premier Investments fighting for what they think is best for the company, the Myer share price has rallied 32.4% during this time from 37 cents to 49 cents at the time of writing.

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Motley Fool contributor Kerry Sun has no position in any of the stocks mentioned. The Motley Fool Australia's parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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