Lew’s Myer investment is finally in the black, but did he miss the takeover boat?

While Lew doesn’t have the appetite for a Myer acquisition, his stake has given him gatekeeper status in case anyone else wants to try.

Lew is more likely to use the window that the Corporations Act allows shareholders with more than 20 percent in a public company to buy 3 percent every six months without having to make a formal takeover bid.

If he takes that opportunity, his stake would rise to nearly 26 percent — a point at which it would be difficult for the Myer board to move without his approval.

Lew increasing his stake in Myer would also reinforce the view that the billionaire will continue to seek control of Myer without making an offer.

Lew will be happy that his investment in Myer is turning profitable, but the department store’s strong performance brings other uncomfortable truths to light for Lew.

Despite his persistent criticism of Myers’ strategy, last year’s results suggest that the changes initiated by its CEO, John King, have caught on. The company now says its sales for the five months ended December 31, 2022 were the best since 2004.

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Net income for the half year ended January this year should rise between 89 percent and 104 percent, the company said in its Tuesday update.

This could give some food for thought to those shareholders who have supported Lew’s claims about firing the Myer board for several years. (Though he’s thrown his support behind King lately.)

After years of acrimony between Lew and the Myer board, the retail billionaire has only managed to secure one representative director — veteran retailer and Lew’s longtime lieutenant, Terry McCartney.

It’s also a fair bet that Lew would still argue that the turnaround at Myer could have been achieved more quickly if the directors’ election had been at the board table.

And while Myer’s performance should be credited, a number of other retail groups including JB Hi-Fi and Super Retail Group (owners of Supercheap Auto and Rebel Sport) have also pointed to a strong six months for sales revenue – as consumers were put off by higher interest Rates and inflation and went to the shops.

While surprised by the strength of Myers trade update, retail analysts remain skeptical about what lies ahead. They wait for consumer spending to hit a brick wall later this year when the full impact of higher interest rates takes hold.

King also acknowledged that the future is uncertain.

“Like most retailers, we remain cautious on the macroeconomic backdrop for the remainder of the calendar year, but are equally confident in the continued momentum we have under the Customer First Plan and a number of initiatives that we are executing,” said he.