Premier Investments' Smiggle Trouble Hides a Valuable Breville Stake

A profit downgrade concentrated in Smiggle's UK business hit the stock, but fund managers see the market undervaluing Premier's 25% Breville holding.

19 Aug 2026 · 2 min read

Premier Investments fell sharply after divesting its Apparel Brands business to Myer left it with just two growth brands, Peter Alexander and Smiggle, and a Smiggle profit downgrade drove the stock down further, before fund managers increasingly focused on the hidden value in its roughly 25 percent stake in Breville as the real reason to keep holding.

A downgrade concentrated in one struggling brand

Ellerston Capital said Premier provided first-half FY26 retail EBIT guidance of $120 million, a 10 percent miss to consensus of $130 million to $135 million, with the downgrade largely driven by Smiggle, particularly its UK business, while the key lifestyle brand Peter Alexander showed consistent, solid performance. Oracle Advisory Group said it exited the position in October as its thesis no longer held up, since after selling the Apparel Brands business to Myer, Premier was left with only two growth brands, noting Peter Alexander was still achieving good growth, with sales up 7.8 percent the prior year and expansion continuing in Australia, though its UK entry has progressed more slowly than anticipated. Endeavor Asset Management said the stock was weak as retail sentiment softened following renewed discussion of potential rate hikes, and exited its position in December, believing the RBA's guidance would do much of the work on inflation but seeing better risk-adjusted opportunities elsewhere.

A hidden Breville stake worth more than the market gives credit for

Lanyon Investment Fund bought shares after Premier sold off significantly owing largely to poor Smiggle performance and broader consumer backdrop concerns, arguing that at current prices the market was simultaneously valuing Smiggle at zero and placing an 80 percent-plus discount on Premier's 25 percent stake in Breville. Airlie Funds Management said the downgrade to first-half FY26 profit guidance was disappointing following the Apparel Brands divestment, but most of the issues are isolated to Smiggle, a small portion of earnings, leaving the stock trading around 10 times look-through EBIT, a steep discount to the small industrials index. Clime Investment Management reinvested proceeds into Premier, taking the view it was significantly undervalued.

At current prices, we think the market is simultaneously valuing Smiggle at zero and placing an 80%+ discount on PMV's 25% stake in Breville.

— Lanyon Investment Fund, Quarterly Report, December 2025

A rate-sensitive rally, then a Breville-linked thesis

Sage Capital said Premier rose 19 percent as the Reserve Bank's decision to pause interest rate hikes sparked a sharp relief rally across the most rate-sensitive parts of the market, including discretionary retail. Airlie Funds Management later said it holds significant indirect exposure to Breville through Premier Investments, which owns around 25 percent of the company.

What fund managers say they are watching next is progress on Smiggle's UK turnaround, continued Peter Alexander growth both domestically and in its slower UK expansion, whether the market's implied deep discount on the Breville stake narrows, and how rate-sensitive sentiment toward discretionary retail continues to evolve.