Myer’s profit shock
Myer boss Richard Umbers is disappointed by the department store’s 80 per cent drop in full-year profit but is committed to his turnaround strategy.
MYER boss Richard Umbers is disappointed by the department store’s 80 per cent drop in full-year profit but is committed to his turnaround strategy, saying the result has “stabilised” the business even as retail conditions remain tough.
Myer is two years into a five-year, $600 million turnaround plan based on giving more space to popular brands, cutting back private labels and closing stores. Mr Umbers, delivering Myer’s full-year results yesterday, said while the down 2.67 per cent to $3.2b
Fully franked final dividend of two cents, down from 3 cents
Full-year payout of five cents a share, unchanged some circles is still quite credible,” Mr Umbers said.
“The execution of New Myer is why we have been able to stabilise what has been a very dramatic decline.”
The retailer made just $11.94 million in statutory net profit for the 52 weeks to July 29, down 80.3 per cent on the previous 53-week year. Total sales fell 2.67 per cent to $3.2 billion and were impacted by the earlier closure of three stores, Brookside in Brisbane and Orange and Wollongong in NSW, and writedowns on the value of fashion brands Top Shop and sass & bide.
Myer announced it will close a further three stores – Colonnades in South Australia, Belconnen in the ACT, and Hornsby in Sydney’s north – in what it said will be another challenging year ahead.
Mr Umbers said the stores were underperforming and their lease agreements were due to expire in 2019 or 2020.
“If you look around the globe there is no question that (department stores) operate in a challenging environment,” he said. He added the first six weeks of FY2018 were below expectations and reflected a “subdued start to the year”.
HIGH HOPES: Myer boss Richard Umbers said, while the “New Myer” strategy hasn’t yet delivered the sales growth anticipated, it is showing promise.