exploring a demerger and sale. Both parties have agreed to conduct reciprocal due diligence and iron out the transaction terms. No such thing as a merger of equals? Myer’s suggested all-scrip merger would make Solomon Lew Myer’s largest shareholder – by issuing new Myer shares to Premier and in turn Lew’s private investment vehicle, Century Plaza Investments. Moreover, Lew would earn himself a seat on the board in addition to the two seats Premier Investments currently holds. “The board’s focus in relation to the proposed transaction will be assessing the potential benefits for Premier shareholders, whilst maintaining the integrity and growth initiatives of its Apparel Brands business,” Premier Investments statement the ASX read.  If the union between these two Australian retail legacies succeeds, Myer could land itself a $1 billion-plus valuation, according to brokers. “While Myer has one of Australia’s strongest retail brands, store networks, and loyalty programs, there is a significant opportunity to reinvest in our product offering, customer engagement capabilities, and further optimise our supply chain to achieve our full potential,” Olivia Wirth, Myer’s CEO, stated. While exclusive and house brands are favourable for department stores’ profit margins, spectators have been quick to point out how well Premier’s Apparel Brands labels stack up to Myer’s Sass & Bide, David Lawrence and Marcs.  “Where to from here for those brands in the absence of this transaction, is the other question,” Brian Walker, founder and CEO of The Retail Doctor Group, pointed out to Inside Retail. “Some might say, ‘This is like two old boxing legends lining up for one last payday’. But the reality is, I think it’s, I think it’s more optimistic than that. I actually do think it’s a clever deal,” he added. A look inside Myer’s playbook The proposed merger between Myer and Apparel Brands – previously known as Just Jeans – is undeniably economically sound with an estimated $55 million in cost synergies. That capital will assist Myer’s growth activities. The point of interest is if this acquisition aligns with Myer’s thus-far successful Customer First plan pioneered by former CEO John King. “I think their long-term strategy is to build on their assets, their loyalty program, their range of retail offering, but in a resized offer,” said Walker. “They are trying to right size, which is the equilibrium point at which the store size makes them require a commodity return.”  The merger comes against the backdrop of a changing retail landscape and with Myer under pressure to increase profitability, improve returns and drive shareholder earnings. “​​With a background in customer loyalty, Olivia Wirth’s strategy at this point is clearly building up Myer’s loyalty programme as a first step,” Robert Crawford, professor of advertising at RMIT, told Inside Retail. “As more business is being done online, this makes good sense and is consistent with John King’s strategy. But I’m interested in seeing how this move would enhance the in-store experience,” he added.  “As some of the brands [in Premier’s portfolio] have their own stores it will be intriguing to see how they will sit in relation to Myer stores.” Premier’s Apparel Brands generated $845 million in revenue last financial year with the vast majority generated across its 717 stores. While the cost synergy appears to be strategically sound, the brand synergy remains to be made clear. “The move seems to be strongly motivated by the desire to enhance online offerings to Myer One loyalty members. However, I am less clear about what it offers for the Myer brand,” said Crawford. “Department stores have historically been innovators, which has been integral to their longevity in the market. They have bought brands in the past so it’s not unprecedented either,” he concluded.