They’re different beasts, but JB Hi-Fi and Myer are showing other retailers how it’s done

Myer is roaring back to life, and there’s much to learn from the strategy of its boss and that of fellow traveller JB Hi-Fi.

Myer chief executive John King has turned the department store operator around.

The results from Myer and a week ago JB Hi-Fi tell us a lot about the two individual companies themselves, the broader retail dynamics, and the post-Covid post-rate hikes economy.

The core point to bear in mind is that JB and Myer sit at opposite ends of the 21st century retail reality.

JB has been one of the outstanding successes, very effectively riding and indeed exploiting and conquering the wired - and indeed, unwired: read Wi-Fi - world of today.

Myer in contrast looked like being confined to the dustbin of sprawling 20th century bricks and mortar department store history. What worked, so brilliantly, for Harry Selfridge and Sydney Myer, worked no more a century later.

Well, no surprise, JB keeps ‘hitting it out of the park’. Sales up 8.6 per cent, profit up 14 per cent. Whatever CEO Terry Smart is putting in the morning coffee, it’s kicking butt.

With apologies to Terry, even more impressive though were the numbers unveiled by Myer CEO John King.

I might add that King is the very model of my perfect CEO: just getting on with delivering results. No bombast, no pontificating. So, please Sol, even if grudgingly, give him a tick.

Myer reported sales up a stunning 25 per cent in the five months to December 31; including an even more mind-boggling 38 per cent actually in its stores. As a consequence online sales actually dropped 9 per cent.

The explanation of both, up to a point, was a certain premier named Dan Andrews, and to a lesser extent one named Dominic Perrottet. That’s to say, those lockdowns in the 2021 base comparative period.

But it wasn’t just about springing back from closed stores. Myer sales were actually up 19 per cent on the last, December half 2019, pre-Covid period.

That’s to say, there is – seemingly rather vibrant – life in the old blended bricks and mortar and online girl after all.

That’s the key point about Myer and King. He’s succeeded in keeping the stores vibrant – albeit, where necessary, closing them – while developing an online business which is now of serious and more critically sufficient scale.

Yes, online sales dropped from the 2021 lockdown comparative period. But they were still way up on the pre-Covid period and now comprise one in every five dollars spent at Myer.

In short, the Myer growth future is online, and it’s got the business to go there, while rebalancing the bricks and mortar to a sustainable, profitable future.

In short, Myer and JB combine to tell us there is a retail future both in stores and online.

The key to success is balancing the two, while precisely locating the physical locations and making the online offer seductive and seamless and indeed connected to the core stores’ physical reality.

Now, there is good and bad news in the broader message delivered by both Myer and JB.

That message is, simply, that despite rate rises, the consumer has disposable money and the consumer is prepared to spend.

The good news should be obvious: the economy ain’t going over any sort of cliff anytime soon.

Further, again both good and bad news, the consumer is spending that money locally.

The ‘bad news’ part is of course what it says about inflation and interest rates.

Simply, that inflation ain’t going to miraculously and conveniently, disappear; and rates aren’t going to go back to the fabulous ‘free money’ levels of 2020 and 2021.

That said, as 2023 unfolds, I suggest that China is going to throw a – positive, broadly unexpected – curve ball into everything.

We are going to see China ‘get back to work’ – simply, delivering cheap product to the world.

I can see a very, very positive global dynamics – if politicians and activists don’t cruel it.