Myer outruns Covid-19, Dan Andrews and interest rates

When John King walked into Myer in 2018 it was at death’s door. Five years on post Covid and interest rates, the retailer is thriving.

Myer’s net debt has been paid off and instore sales have barely slipped over the past five years. Picture: Richard Walker

John King has been the quiet achiever of Australian business.

When, five years ago in June 2018 he walked in the door of Myer – for much of the 20th century Australia’s pre-eminent and lusciously profitable retailer in any field and not just the great middle market department stores that it dominated – it was quite literally at death’s door.

Myer was trapped in a seemingly unending 20th century bricks-and-mortar retailing nightmare in a 21st century Amazon and Apple real-time online reality.

It also had the billionaire Solomon Lew – who had been in and out of the Myer boardroom over nearly half a century – in 2018 he was once again out and wanting in – snapping, hell, tearing and endlessly snarling, at the heels and throats of the hapless Myer directors.

Lew very quickly directed his limitless – and as Australia’s “Mr Retailing”, usually pretty savvy – ire also at King.

But King just buckled down, took himself right out of public view – in sharp contrast to some of his more colourful and “out there” CEO predecessors at both Myer and David Jones, who felt duty bound to share the fashion limelight and glamour. Think, as I dubbed him, “Metro Man” Mark McInnes at DJs – and who would have come back and into King’s chair at Myer if Lew had won the boardroom.

Think also Jennifer Hawkins at Myer and Megan Gale at DJs. Then, barely a year and a half into the job, King ran smack into Covid-19.

And into Victorian Premier Chairman Dan and his brutal seemingly all but permanent lockdowns in Myer’s biggest and most important state, and its biggest and most important city, Melbourne.

Yes, the lockdowns “encouraged” Myer to fast track its online future. But they obviously shredded store sales and brutalised costs, for which JobKeeper was only a very partial offset. But look at the results five years on from his arrival and coming up for two years past Covid-19. And Lockdown Dan.

And compare and contrast with a floundering DJs and its foreign owner desperately seeking out and finally succeeding in a down-market – very un-DJs – bargain basement sale.

In the 2018 pre-King fiscal year, total Myer sales were $3.1bn. Of that, online sales were just $239m. Net debt added to $107m. The share price was 37c.

In fiscal 2023, total sales were some 8 per cent higher at $3.36bn.

Yes, that growth is no Bunnings, no JB – the two superstars of down under retail.

But heck, it’s not bad for a retailer that could so easily have been buried in the 20th century, or indeed the early 21st, as so many have.

Within that, Myer online sales tripled over the five years to $690m.

Yes, that reflected Covid desperation. But it was also King building a powerful, and profitable online model to sit within and beside the bricks and mortar.

Both streams more than survived not just the Covid years but retailing’s own version of “long Covid”; and, more recently, Philip Lowe’s rate hikes.

In-store sales have slipped only 7 per cent over the five years. Net debt has been paid off and there is $120m in the till. The share price is 60c, even after Tuesday’s 10c drop.

Originally published as Myer outruns Covid-19, Dan Andrews and interest rates