MYER TURNS TO COST-CUTTING, EXECUTIVE SWITCH
MYER has reshuffled its executive ranks and will cut 50 jobs and give up another floor of office space at its headquarters.
The department store chain will replace its chief financial officer and create a new chief operating officer role.
The changes come as analysts warn the beleaguered retailer will likely need to slash the value of its brands and goodwill, noting the book value of intangible assets in Myer’s accounts far exceeds its market capitalisation. Australia’s corporate watchdog is understood to be probing the high carrying value of intangible assets at Myer. They are almost double the group’s market value.
Myer, which issued an unusual pre-Christmas profit warning, is also under pressure from major shareholder Solomon Lew, who is pushing to overhaul its board.
Former Spotless chief financial officer Nigel Chadwick will replace Grant Devonport as Myer chief financial officer at the end of the month.
Mr Chadwick has previously served as group treasurer at BHP Billiton and general manager of corporate accounting at Telstra.
Myer chief Richard Umbers said Mr Davenport had resigned to pursue other interests having made “a very strong contribution to the new Myer strategy”.
Mr Umbers said he was aware of the speculation swirling around the value of Myer’s intangible assets.
But he said the retailer would be sticking to its protocol of assessing them at its half and full-year results.
“We assess the carrying value of intangible assets at the half and the full-year and obviously we do that with the full support of our auditors,” he said. “We’ll be following that normal protocol.”
Tom Kierath, an analyst at investment bank Morgan Stanley, has previously warned Myer’s ongoing poor performance and share price slide “called into question” the carrying value of its brands and goodwill.
“Given its (Myer’s) continued poor performance, the carrying value of goodwill and brand names must be called into question,” he said last month. This was particularly so, “given the current equity market capitalisation of about $550 million is considerably below 2017 book value of more than $1 billion”, Mr Kierath said.
Myer’s market value has since slipped further, sitting at $530 million at the close of trade yesterday. Shares in Myer closed down 1¢, or 1.5 per cent, yesterday at 64.5 ¢.