The boss of Solomon Lew’s fashion retail company, Just Group, wrote to the federal minister Michaelia Cash and the assistant treasurer, Michael Sukkar, to complain about the small business ombudsman Kate Carnell, documents released to Guardian Australia show.
In a letter sent on 1 October last year, Mark McInnes complained that Carnell had described Just and its parent company, Premier Investments, as “unethical” for delaying payments to suppliers for as long as six months.
Premier operates some of Australia’s best-known retail chains including Dotti, Just Jeans, Peter Alexander and Smiggle.
Cash was the employment minister at the time and is now the attorney general.
In the letter, released by Treasury in response to a freedom of information request, McInnes also complained about statements by Carnell that it was “unacceptable for big entities like Premier to use late payment as a method of making their figures look better” and that the company was “pushing out the little guys that have nowhere to go”.
“These public statements and the imputations that they raise – namely that we have abused a superior bargaining position and have exploited smaller suppliers to boost our bottom line – are simply not true and ignore critical facts and context,” McInnes said.
Much of McInnes’s letter has been redacted by Treasury FoI officials on the grounds its release would adversely affect Premier’s business interests.
But McInnes accused Carnell of ignoring “critical facts” including that “the request for temporary support from suppliers was not framed as a demand”.
“Instead, it was communicated as a temporary request for support from suppliers – with a view to allowing our partnership with suppliers to rebound in the long term following the effects of the pandemic,” he said.
He said the company had resumed paying suppliers as soon as it was able and “as a result of these payments, suppliers were not required to wait anywhere near 180 days”.
“I trust that the above facts demonstrate clearly to you that we have never sought to exploit smaller suppliers for the purposes of seeking to unjustifiably improve our financial standing,” he said.
McInnes said the Covid-19 pandemic had “raised extreme challenges”. “We took responsible action at a time when we, like many retailers, were forced to shut our stores and had no ability to know when we would be able to reopen,” he said.
Premier also stopped paying its landlords during the pandemic.
It received in excess of $70m in jobkeeper even though sales and profits soared throughout the pandemic, rising 30% in the year to 25 July 2020 and a further 90% in the following six months.
Dividends to Lew, who owns more than 42% of the company, totalled more than $45m, helping to fuel pressure on Premier to pay back jobkeeper. In May it said it would repay about $15m.
Carnell, who was replaced as ombudsman by Bruce Billson in March, told Guardian Australia she stood by her remarks. “At the end of the day there is no excuse for big business to pay small business slowly,” she said.
“Thirty days is slow these days, so it must be less than 30 days, and it wasn’t. I don’t step away from saying those things publicly.”
Premier has been contacted for comment.
