Bells toll for Myer top brass as cost-cutting drive bites

Myer has slashed more jobs still, thinning out its management ranks as a deep-cost cutting program at the troubled department store chain continues. Here are the latest details.

Myer is thinning the ranks of its management team.

Myer has slashed 50 jobs as chief executive John King thins management ranks as part of a deep-cost cutting program at the troubled department store chain.

Among those to go is marketing general manager Andrew Egan, who led the “My Store” campaign as well as the recent Christmas and stocktake sales campaigns.

The latest cuts at Myer follow a management overhaul at key rival David Jones after its chief executive, David Thomas, abruptly left the business on the back of sliding sales.

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Department stores are reeling globally as they face new ­online competition, a rise in ­specialty stores and high costs associated with large outlets in shopping centres where long-term leases are difficult to break.

Myer has also been hard hit by the arrival of fast fashion chains such as Sweden’s Hennes & Mauritz, trading as H&M, Spain’s Zara and Japanese chain Uniqlo, which have collectively snared more than $800 million in annual sales since landing here in recent years.

Myer has been under pressure as the rise of online shopping and fast-fashion interlopers take a toll.

The department store chain has made deep cuts to its head office over the past three years and is working to shrink the amount of space it takes up at its Docklands headquarters from six to three storeys.

Myer took out all 10 storeys when it moved into the custom built, $200 million office complex in 2010.

Mr King cut 50 head office roles in August last year, little more than two months after ­officially taking the helm.

The latest round of redundancies have been made in Myer’s marketing and merchandise departments at its head office and across its store network, involving administrative and management roles.

Myer said in a statement on Thursday that the redundancies were the result of its “customer first” strategy.

The retailer has reduced the amount of space it occupies at its Docklands head office.

“From doing a thorough ­review of our entire store ­management structure and a further review of the store ­support ­office, we have identified opportunities to align more closely with our customers, with streamlined roles, clearer ­accountabilities and improved efficiency,” a spokesman said.

“This will ensure we operate in a more efficient manner to improve the financial performance of the business and to deliver shareholder value.”

Myer earlier this month ­announced it was back in the black, posting a net profit of $38.4 million for the 26 weeks to January 26.

The haul was a turnaround from a $476.2 million loss it ­reported for the same period a year earlier, when it took major writedowns on the value of its brand.

Total sales fell 2.8 per cent to $1.67 billion but sales of Myer-exclusive brands — those it owns or which can only be bought there — rose 3.7 per cent.

Myer chief John King has rolled out a plan to restore the fortunes of the chain.

Unveiling the results, Mr King said the department store chain had “steadied the ship”.

But he warned sales were ­expected to come under pressure over the next six months due to uncertainty around the upcoming federal election and sliding housing prices.

Mr King stepped into the role after Myer’s biggest shareholder, retail billionaire Solomon Lew, began a ferocious attack aimed at replacing the ­department store’s board.

Mr Lew is the biggest ­shareholder in fashion house Premier Investments, which has an 11 per cent stake in Myer and is a major supplier to the ­retailer.

Premier, whose stable of brands includes Just Jeans, Smiggle and Peter Alexander, will release its first-half results today.

Shares in Myer closed flat on Thursday at 57c. The retailer was floated on the Australian Securities Exchange late in 2009 for $4.10 a share.