Myer to overhaul womenswear range as it fights to turn around sales
Myer admits it has a major problem with its womenswear offer. Here is what the department store chain is doing about it.
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Myer is undertaking a major overhaul of its womenswear division as it attempts to better differentiate its private-label brands and roll out a more basic, affordable range.
Chief executive John King said the department store chain’s womenswear was a clear weak point and it would begin rolling out new designs and revamped store layouts over the next six months.
“We are not going high fashion — we are fashionable with a small f and we will be affordable,” Mr King told Business Daily on Friday.
“Womenswear has been disappointing for some time … I think a few years ago we pushed the needle too far in terms of expensive fashion, which was one of the reasons we needed clearance floors.”
Myer on Friday reported net profit in the 26 weeks to January 25 had tumbled 37 per cent from a year earlier, to $24.4 million.
The hit to the bottom line came as it absorbed $15.2 million in restructuring costs associated with the end of its discount floor experiment and the exit of brands such as Country Road, Trenery, Witchery and Apple.
Underlying profit, which strips out one-offs, rose 0.4 per cent to $41.5 million. Total sales fell 3.8 per cent to $1.6 billion but like-for-like sales, which strip out the impact of stores opening and closing, rose 0.4 per cent.
Former beauty and lingerie general manager Sue Price took over the womenswear division in October.
Separate design teams for private-label brands such as Basque and Piper have been set up in order to give them a more differentiated range.
Mr King said the retailer would continue to dump labels that were not resonating with shoppers and would increase the floor space of those that were, such as Seed, Karl Lagerfeld Paris and Tommy Hilfiger.
“We’ve had a proliferation of brands and we probably didn’t have the right delineation between our own private-label brands,” he said.
“We kept buying small bits of everything instead of making big statements.
“We’re making the big bigger. You will see a tidy-up of the womenswear offer to make it easier to shop.”
Myer is the latest retailer to be hit by the coronavirus outbreak, with orders from China being delayed four to six weeks.
Mr King said the disruption would not result in empty shelves and its Chinese suppliers would all be up and running by today.
“We have cancelled some stuff because it was going to be too late to sell but we have substituted it out for other product,” he said.
Foot traffic at Myer’s flagship Melbourne and Sydney stores, and Melbourne’s Chadstone outlet — which attract large numbers of tourists — had fallen but its regional and suburban network was holding up, Mr King said.
He called on the federal government to pull the trigger on a new round of stimulus measures such as tax cuts, or cash handouts such as those issued in the global financial crisis, saying interest rate cuts were not lifting consumer spending.
“With rate cuts, people tend to just pay down their mortgage faster,” Mr King said.
“I think something we can put into consumers’ hands would be good.”
Myer shares closed down 4.4 per cent, or 1.5c, on Friday at 33c.
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