Myer (ASX:MYR) share price holds the fort amid news of Vicinity lawsuit

Another legal challenge is thrown Myer’s way…
The post Myer (ASX:MYR) share price holds the fort amid news of Vicinity lawsuit appeared first on The Motley Fool Australia. –

Shares in department store group Myer Holdings Ltd (ASX: MYR) held the fort today and finished flat at 52 cents.

Myer shares spent a good portion of the session in the red but managed to claw back some territory in the final hour of trade.

This trading activity comes amid news the group is facing legal action from shopping centre landlord Vicinity Centres.

Here is what we know on the matter.

What is going down with Myer and Vicinity?

Back-tracking to 2020, when the coronavirus first infiltrated the global economy, shopping centres and department stores alike were sent into lockdown.

If it weren’t for online sales, then a good portion of retailers would be out of business indefinitely this year. Especially considering the exorbitant rent prices across major cities in Australia, as well as other factors like debt serving and staff payments.

There have been numerous controversies on the dynamics between landlord and lessee in basically all property domains across 2020–2021. This comes as both sides seek protection from the economic fallout of COVID-19.

Such is the case in Myer’s situation, where Vicinity claims that the department store giant has failed to pay over $4 million in outstanding rent this year.

According to reporting from The Australian, Vicinity claims that Myer is behind on rent from the months of May to October and is in arrears by $4.2 million.

And given Myer recorded a substantial growth in operating gross profit in FY21 to 39.7% – up from 38.9% in FY19 before COVID – and recorded over $50 million in net profit after tax, it comes as little surprise why Vicinity is playing hardball.

The news follows on from a previous legal battle Myer was embroiled in, although this time with large shareholder Premier Investments Limited (ASX: PMV) in July.

Back then Premier instructed its lawyers to immediately request a copy of Myer’s shareholder registry, advocating that Myer’s “three remaining Non-Executive Directors should for once put its shareholders first and resign immediately”.

Hence, the additional legal pressure could be a costly one to Myer, given it now faces a multi-pronged challenge from both Vicinity and Premier.

The market didn’t reacted poorly to the news today, which isn’t considered price-sensitive at this stage. However, it is still unclear if this will have any material impact on Myer’s share price.

Myer share price snapshot

In spite of the pandemic’s effects to the retail market, Myer’s share price has soared over 96% in the last 12 months.

This is after rallying another 79% since January 1. Both of these results are well ahead of the benchmark S&P/ASX 200 index (ASX: XJO)’s gain of around 17% in the last year.

The post Myer (ASX:MYR) share price holds the fort amid news of Vicinity lawsuit appeared first on The Motley Fool Australia.

Should you invest $1,000 in Myer Holdings right now?

Before you consider Myer Holdings, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Myer Holdings wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

2 ASX shares that could be buys for both growth and dividends

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 recommended Premier Investments Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;

To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.

An active and funded account with a positive trading balance is required to continue to have access to the tools;

Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;

Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!