Myer makes small profit

Fall in sales weighs on dept store’s $24.5m result

MYER has eked out a narrow full-year profit of $24.5 million, but the department store chain’s sales fell again, particularly during a difficult second half.

While the bottom line was an improvement on last year’s writedown-driven $486 million loss, revenue for the 12 months to June 30 fell by 3.5 per cent to $2.99 billion.

Comparable store sales fell by 2.9 per cent over the full year, which Myer said reflected its focus on profitable sales as opposed to discounting. The decline slowed to 1.3 per cent once Apple products, which were removed in May, were excluded.

But the decline in comparable sales accelerated to 3.8 per cent in the second half, when total sales dropped 4.4 per cent.

Partly offsetting this were improvements in merchandise and store layouts and a 21.9 per cent growth in full-year digital sales to $292.1 million. Fullyear underlying profit rose 2.2 per cent to $33.2 million, while net debt reduced by $69 million to $39 million on June 30.

The company again refrained from paying a dividend.

Chief executive and managing director John King – who was appointed in May last year – hailed Myer’s cost management, which he said saved $32.6 million through a new staffing model, a more focused marketing spend, and reduced store occupancy.

Since July 2018, Myer has either closed or announced the closure of 29,000sq m in store gross lettable area with a further 5.0 per cent to 10 per cent under active discussion.

Mr King (pictured) admitted there was more to be done to transform the business in the interests of customers and shareholders.

“In addition to cost savings expected with further space reductions, material opportunities remain to reduce costs in supply chain and fulfilment, as well as other non-customer facing activities,” he said.

Many retailers are hurting as tough trading conditions prevail amid weak household consumption and stagnant wage growth.

This includes Myer’s traditional rival David Jones, which posted a 42 per cent decline in full-year operating profit last week.

Official figures this week showed retail sales at department stores declined in June for a seventh month out of 12.

Myer did not offer concrete guidance yesterday but said a “significant brand refresh” was currently underway with an additional 40 new brands set to arrive in-store by this Christmas.