Um­bers bat­tles on af­ter Myer profit warn­ing

The Weekend Australian - - BUSINESS - ELI GREENBLAT RE­TAIL

Myer chief ex­ec­u­tive Richard Um­bers is re­fus­ing to be drawn on whether he has of­fered to re­sign af­ter over­see­ing a third profit warn­ing since launch­ing a $600 mil­lion turn­around strat­egy in late 2015.

He has put up a spir­ited de­fence, say­ing he can’t “lose faith” and that he is “get­ting stuck in”.

Mr Um­bers said his Myer team weren’t the kind of peo­ple to be thrown by set­backs.

“We have to keep our eye on the prize, even though in the con­text of this re­sult that might seem way off,” he said. “It is in­ter­est­ing that we are still mak­ing re­ally good progress on so many el­e­ments of the strat­egy, but get­ting on with it is re­ally the im­por­tant thing here.

“What we have got to do is not be in­ter­rupted be­cause of what has hap­pened. We need to ac­tu­ally get on with it and re­ally trade the busi­ness hard.”

But he soon might not have any choice, with Myer’s lat­est profit warn­ing and share price rout adding weight to bil­lion­aire and ma­jor share­holder Solomon Lew’s cam­paign to tip out the en­tire Myer board at an ex­tra­or­di­nary share­hold­ers meet­ing.

Speak­ing to The Week­end Aus­tralian yes­ter­day af­ter Myer un- veiled a shock profit down­grade in the wake of wors­en­ing sales in De­cem­ber and Jan­u­ary, Mr Um­bers hinted that he was not leav­ing in the near fu­ture and em­pha­sised his com­mit­ment to his “New Myer” strat­egy de­spite hor­ren­dous re­tail con­di­tions.

“I can’t lose faith in what we are try­ing to achieve here, and we have got to see through the strat­egy and make sure that we use oc­ca­sions like this to re­ally make sure that we are putting the right em­pha­sis into chang­ing the busi­ness,’’ he said as shares in Myer fell 9.3 per cent to a new low of 58.5cs.

Myer was floated in 2009 by its pri­vate eq­uity own­ers at $4.10 per share.

Myer’s big­gest share­holder, Solomon Lew’s Premier In­vest­ments, yes­ter­day said Myer was in “peril”.

“As Premier has said from the out­set, the num­bers don’t lie. To­day’s num­bers show that the dis­as­trous sales and profit de­cline within Myer is ac­cel­er­at­ing,” the com­pany said.

“Myer is now in peril and share­hold­ers must ur­gently unite to save the com­pany and what is left of our in­vest­ments. Premier will cau­cus with other sig­nif­i­cant share­hold­ers in or­der to re­con­sti­tute the en­tire Myer board.

“Fol­low­ing share­holder dis­cus­sion, a board com­prised of a ma­jor­ity of in­de­pen­dent di­rec­tors would be put to a pro­posed EGM of all share­hold­ers.’’

Ear­lier this week Premier said it would soon call an EGM to eject all Myer di­rec­tors.

Mr Um­bers said there were some pos­i­tive signs, in­clud­ing slim­mer in­ven­tory po­si­tions, cost cut­ting, an im­proved Myer One loy­alty scheme, bet­ter use of data and 48.9 per cent first-half growth in on­line sales.

“These are all demon­strat­ing the progress we are mak­ing here, and for me it’s about mak­ing sure we do stay true to that and com­mit­ted to the long term strat­egy. But I ab­so­lutely recog­nise that in the short term we have got to trade the busi­ness hard and make sure we are re­ally re­spond­ing to the trad­ing con­di­tions … and it’s a tough mar­ket.’’

Myer yes­ter­day told the Aus­tralian Se­cu­ri­ties Ex­change that af­ter like-for-like sales were down 5 per cent in the first two weeks of De­cem­ber, trad­ing dur­ing the key stock­take sales pe­riod was also be­low ex­pec­ta­tions, with to­tal sales for Jan­u­ary down 6.5 per cent on the pre­vi­ous cor­re­spond­ing pe- riod. To­tal sales for the first half of 2017-18 were down 3.6 per cent to $1.719bn, the com­pany said, and down 3 per cent on a like-for-like sales ba­sis.

Myer said de­spite the sales short­fall through De­cem­ber and Jan­u­ary, it re­mained com­fort­able with the qual­ity of its in­ven­tory.

As a re­sult of this wors­en­ing sales per­for­mance, Myer ex­pects first-half 2017-18 net profit to be between $37m and $41m be­fore im­ple­men­ta­tion costs and other sig­nif­i­cant items. This is down more than 40 per cent.

Myer chair­man Garry Houn­sell said he recog­nised that share­hold­ers would be dis­ap­pointed with the an­nounce­ment.

Richard Um­bers

Newspapers in English

Newspapers from Australia

© PressReader. All rights reserved.