Myer sales, profit dragged down by store closures and underperforming brands
Department store Myer has blamed a challenging trading environment, inflationary pressures and the closure of two key locations for a forecast slide in full-year profit by as much as $21 million.
Myer’s new executive chair Olivia Wirth faces an uphill battle as department stores grapple with a more uncertain future with the likes of Amazon and ultra-cheap fashion retailers Shein and Temu rapidly gaining popularity.
In a trading update on Thursday, Myer said it expects net profit for the 2024 financial year to hit between $50m and $54m, compared with the $71.1m reported in the previous year.
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By continuing you agree to our Terms and Privacy Policy.The underperformance of Myer-owned labels Sass & Bide, Marc and David Lawrence — which were put up for sale earlier this year — is expected to represent about half of the year-on-year decline in profit.
Total sales for the period slipped 2.9 per cent to $3.27 billion as a result of the Brisbane City and Frankston store closures.
Second-half comparable sales are predicted to be up 0.8 per cent on the same time last year, with full-year same-store sales up by just 0.4 per cent.
“Total group inventory is expected to be consistent year-on-year reflecting tight inventory management and increased focus on newness,” Myer said.
Ms Wirth — who took over the top job from John King in June — said Myer was focused on optimising operational performance, including tightly managing costs, inventory and margins, in a tougher trading environment.
It was also leveraging its Myer One loyalty program.
“The second half sales performance demonstrates resilience in the face of a difficult trading environment for Myer and the wider retail sector, coupled most notably with the closure of our Brisbane CBD store and the underperformance of the Sass & Bide, Marcs and David Lawrence brands,” she said.
“We are also positioning the business for growth and are well progressed in a comprehensive strategic review of the business.”
The negative trading update on Thursday sent Myer shares down 7.1 per cent to 78¢.
It also comes as the Myer board explores a tie-up with Solomon Lew’s Premier Investments that would see the department store buy Premier’s apparel brands business, which owns labels Just Jeans, Jay Jays, Portmans, Jacqui E and Dotti.
