Ron Brierley rides again, builds stake in Smiths City
Brierley's Mercantile Investment Co and Sandon Capital have built up a combined 7.2% stake in the retail chain.
Veteran corporate investor Ron Brierley is sniffing out opportunities in Christchurch-based retail chain Smiths City [NZX: SCY], which has started closing down unprofitable stores to eke out a lift in earnings.
Brierley's Mercantile Investment Co and Sandon Capital have built up a combined 7.2% stake in the retail chain, and will "act in concert in relation to their conduct as shareholders" of Smiths City, according to a substantial shareholder notice filed to the ASX and NZX.
Each fund has built up a 3.6% stake, collectively buying 1.89 million shares between August 11-27 at an average price of 52c per share, the filings show.
That makes them the third biggest shareholder in the retail chain behind California-based Guaranty Finance Investors with 18%, and the Duncan Saville-managed UK fund, Utilico Investors, with about 14%.
Sydney-based Sandon Capital principal Gabriel Radzyminski, who also sits on the Mercantile board, told BusinessDesk the funds will make a comment on their investment in the coming weeks.
Smiths City this week told shareholders at the annual meeting that sales were down 2% in the first four months of the financial year and that plans to keep closing unprofitable stores will continue in what's become an increasingly competitive environment for traditional bricks-and-mortar retailers.
This year, Smiths City appointed 'turnaround specialist' Roy Campbell as chief executive, to improve returns from the retail operation.
Brierley's interest in Smiths City comes after he beefed up exposure to Wellington's flagship department store, Kirkcaldie & Stains, which is set to transform into the country's first David Jones outlet.
Mercantile joined the NZX last month, after Brierley took control of the ASX-listed fund in 2012. He owns about 46% of the firm.
Smiths City shares rose 5.6% to 55c, a two-month high, having declined 3.7% since the start of the year.
Mercantile's shares last traded at 17c on the NZX, and 13Ac on the ASX. Sandon's ASX-listed stock last traded at 89Ac.
(BusinessDesk)
Joshua Riddiford
Fri, 28 Aug 2015
Fri, 28 Aug 2015
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Ron Brierley rides again, builds stake in Smiths City
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