Bails Myer and the two great Myer family fortunes

Baillieu Myer with wife Sarah and their family, in 2008. Granddaughter Charlotte Myer sits on his knee.

Baillieu “Bails” Myer’s strategic foresight generated the two Myer family fortunes that arose out of the Myer empire founded by his father Sidney Myer.

And in the process, Bails Myer crafted one of Australia’s most successful family transformations from a single business operation into a family investment company. Few other families have been able to achieve such a transformation.

And the tradition of philanthropy that was established by his father, was not only continued but greatly expanded by the next Myer generation. And in the process of this remarkable family transformation, the quietly spoken Bails Myer became a mentor to a large number of successful Australian executives and community leaders.

Bails Myer became chairman of the Melbourne based Myer Emporium in 1978 and at the time it was the most successful retailer in the land. But it had an obvious gap – it did not have a significant presence in Sydney.

The Grace family was one of Sydney’s great retailers and when in 1983 it became possible to buy Grace Brothers, Bails Myer took the opportunity to make Myer a true national retailer.

But Bails Myer had a deep inner conservatism and he insisted that to help fund the Grace acquisition Myer should sell its Chadstone shopping centre. In hindsight that decision was a mistake, but it became the base of the great John Gandel retail shopping centre fortune.

Later Solomon Lew purchased around 10 per cent of Myer and Bails Myer decided that he should also be a director. Not all the members of the Myer family agreed but Bails held sway.

And then came the next opportunity to expand the scope of the Myer Emporium – Myer began talking with the US owned Safeway supermarket chain with the view to buying its Australian stores and taking Myer into supermarkets. The then Coles CEO Brian Quinn, who was later to be jailed for corporate fraud, some how got wind of the Myer Safeway talks. He launched a takeover bid for Myer under the pretext of a “merger”.

Later I discovered that Bails Myer and the then chairman of Coles, Bevan Bradbury (a former Coles CEO), had private discussions in which they both agreed that the merger could be bad for both companies.

But at Coles the determination of Brian Quinn overrode any apprehensions Bradbury may have held. Bradbury stood down as chairman a year or two later. (When the Myer Safeway talks ended Woolworths were able to buy Safeway, which enabled them to get a major position in Victoria and become a truly national supermarket operation – just as Myer had done in department stores when it took over Grace Brothers)

As soon as the so-called Coles-Myer “merger” was consummated it was clear it was a takeover and Brian Quinn took control. The role of Coles founders completely overshadowed the Myer family in the Coles narrative.

Over time, the Myer family sold most of their stock and made their first fortune. But Bradbury and Bails Myer were right, and the merger was a total disaster. Later Wesfarmers bought the troubled Coles Myer and confirmed the original Bails Myer-Bradbury conclusion.

In 2006 the private equity group TPG purchased the Myer operation from Wesfarmers with the Myer family as a minority partner. The Myer family under Bails Myer had a complex stake in the TPG bid, including a substantial equity in the Myer Bourke street Melbourne property. When TPG floated Myer in 2009 the Myer family did extremely well and their fortunes were further enhanced when later the property was sold. This was the second fortune.

The tragedy is that the Myer business itself had been deeply damaged by the succession of owners and managers.

With the benefit of hindsight Myer needed to have bought speciality retailers and enhanced their operations along the lines of what Bunnings is now doing. Myer also had the best customer base in the land. Most people had a Myer card.

The managers of the day never realised that Myer was the best placed retail operation in Australia to transfer their retail base into online trading. By the time the managers woke up the base had been eroded and it was too late.

Sidney Myer was not only a great retailer, but he also thought deeply about how his fortune should be allocated to subsequent generations. And so, his children — including Bails and the late Ken Myer — received the income from the assets in the Myer empire. The next generation of the Myer children (Sidney Myer’s grand children) received the benefit of the capital value of the assets.

The Sidney Myer Charitable foundation received a share of both the income and the capital of the Myer assets. Accordingly, the original Sidney Myer charity continues to benefit worthy causes around the country. But Ken and Baillieu set up their own foundation which is also a major philanthropic force around the country. A great many Australian charities and causes have benefited from the two great Myer family fortunes. And out of those fortunes has come one of the most successful family investment operations in the country.

None of this would have been possible but for the talents of Baillieu Myer to seek out differing points of view before making a strategic decision. And that ability to be able to bring together all sides of an argument before making a decision has also greatly benefited those that have been helped by his mentorship.

A great many Australians are saddened by the passing of Bails Myer.