Myer to bin ‘hated’ clearance floors

New CEO John King “hates” the Myer clearance floors launched by his predecessor and says they’ll be scrapped by next year.

A Myer sale in Melbourne. Pic: Stuart McEvoy

Recently-appointed Myer chief executive John King is already dismantling the strategy of former CEO Richard Umbers, declaring he “hated” the Myer “clearance floors” his predecessor introduced only last year, and said they would soon be gone.

Speaking to analysts after releasing Myer’s latest full-year results, Mr King also referred to the disastrous performance of the British retailer House of Fraser since he departed as CEO four years ago, saying it had performed well “before the Chinese bought it and set fire to it”.

Reflecting on the department store sector, Mr King, who has notched up 100 days at Myer, said he believed the retail format certainly had a future, but that Myer needed to execute on its promises and deliver a better offer to shoppers.

New Myer CEO John King.

As part of that strategy Mr King declared he would be snuffing out the specialist discount floors Mr Umbers had started to roll out last year under the “Myer Clearance” brand.

Under the strategy, entire floors within a number of Myer stores were dedicated to clearance stock sold at massive discounts.

“Absolutely, I hate them,’’ Mr King said when asked about the discount floors rolled out at half a dozen Myer stores.

The idea was one of the strategies launched by Mr Umbers last year as he tried to resuscitate earnings at the retailer.

Richard Umbers releases Myer’s results a year ago. Pic: Aaron Francis

Only late last year senior Myer executives said the Myer Clearance stores were “here to stay”.

Mr King today told analysts the clearance floors would be gone by next year.

The Myer Clearance stores were also despised by Myer’s largest shareholder and billionaire Solomon Lew, who when visiting Myer stores described the stock as so awful and old that it belonged in the Salvation Army.

Reflecting on the department store model, Mr King said the retail format did have a future in Australia.

“I think they are only a winning format when they are relevant to the customer, I think first thing is to make Myer more relevant and I don’t think if we carry on like we have before we can achieve that.

“Department stores can be relevant but you have to give a reason for people to come in.”

Mr King also said Myer wouldn’t chase unprofitable sales,

‘’We will not sell anything at any price.

“We will not chase unprofitable sales just to get a top line number.’’