Department store giant Myer will purchase a slew of fashion chains, giving it ownership of nearly 800 retail stores across Australia and New Zealand.

Myer has struck a deal with Premier Investments to purchase its clothing division Apparel Brands, which includes Just Jeans, Jay Jays, Portmans, Dotti and Jacqui E.

The combined group will have more than 780 stores across Australia and New Zealand, with around 17,300 employees.

Premier will retain ownership of its Smiggle stationery brand and sleepwear label Peter Alexander.

In exchange for Apparel Brands, Myer will issue new shares to Premier, which it will distribute to its investors — the new shares will account for more than 51 per cent of Myer.

The deal needs to be approved by both company's shareholders and regulators.

Premier Investment's chairman Solomon Lew will join the board of Myer once the transaction is completed.

'Do or die' for Myer brand, retail consultant says

Myer chief executive Olivia Wirth described the acquisition of the brands as "transformational" for the department store chain.

Sam Koch from Wilson Asset Management, which holds 5 per cent of Myer stock, agreed with Ms Wirth's characterisation, telling ABC's The Business they would vote in favour of the merger.

But veteran retail consultant Geoff Dart did not support the move, arguing it  "does not make sense".

"It's going to be a real struggle, it honestly is. It's not a healthy environment for retail, generally," Mr Dart said.

He argued the deal was a win for Premier but could spell disaster for Myer, which he described as an "old, tired" brand that needed a marketing overhaul. 

"I'd rebrand Myer — the time's come where it's either do or die."

He noted that an enormous amount of investment had already gone into refitting Myer stores.

"They just have to do things differently and be modern and international which they're not."

Retail analyst at E&P Financial Group Kade Madigan was more positive about the transaction, saying the merger of Myer and Apparel Brands would give the combined group "improved purchasing power in products where the two businesses overlap".

Mr Madigan also said that Apparel Brands could reduce costs by leveraging Myer's existing infrastructure.

He noted that Smiggle and Peter Alexander, which will remain as part of Premier, made up more of the company's earnings that he had expected, compared to the lower contribution from the clothing brands.

Premier's Solomon Lew confirmed on Tuesday that Premier was still considering a demerger of Peter Alexander, while also expanding the brand further overseas.

"I won't call out the US at this point in time but … yes, confirming that we will expand the Peter Alexander Northern Hemisphere opportunities, both with finding the right partners or investing directly ourselves," Mr Lew said, pointing out a recent store opening in the UK, along with several other stores being refitted.

Myer to take on 700 stores after closing sass & bide shops

Ms Wirth told an investor call that Myer directors had unanimously recommended shareholders approve the merger, which was expected to be finalised next year pending necessary approvals. 

She said the goal of the merger was to become a "robust, omnichannel retail entity" with an engaged loyalty customer base, spruiking the retailers "Myer One" program.

Premier currently has more than 700 clothing stores, while Myer has 64 stores, including sass & bide, Marcs and David Lawrence.

Myer has been reviewing its retail footprint and approached Premier about a deal back in June.

In August, it announced the majority of its sass & bide stores would close.

Mr Lew has long pursued Myer and his Premier Investments was already the retailer's major shareholder, after years of buying up stock.