Margin Call: Myer to disappear from Melbourne skyline

New headquarters for Myer at 800 Collins St, Docklands. Picture: Paul Trezise

Oh the humiliation.

New imported Myer boss John King is getting on with the business of slashing and burning to save costs at the one-time retail giant.

That means a significantly reduced headcount at the Garry Hounsell-chaired department store group’s Docklands head office on Melbourne’s Collins Street, where the Myer livery proudly hangs atop the shiny eight-year-old building that boasts ten levels of office space.

But one corporate loss is another’s gain, with the now $350 million Myer’s co-tenant, the soon-to-be-floated Latitude Financial Services, set to take over the floor space that Myer is set to relinquish.

But that’s not all that the rapidly growing former GE Money, run by Sean Morrissey, will take over from King and Hounsell.

Margin Call understands that Latitude is close to securing naming rights to the A-Grade Victoria Harbour building, so that the Myer signage will disappear from the Melbourne skyline in favour of Latitude’s neon.

It’s all bold change for King, 56, who formerly ran House of Fraser in the UK and who started with Hounsell six weeks ago, but who day-by-day is already accumulating wealth thanks to his employment contract.

For each month that ticks over with King at the helm, he collects about 68,000 rights to Myer shares that will vest after he’s been three years in the job.

At Myer’s share price of 42 cents, that’s wealth of about $28,000 to King, who is yet to move into permanent accommodation in Melbourne.

For he’s based in a serviced apartment in the clouds at nearby Freshwater Place, which if Hounsell is paying for it, is costing Myer shareholders about $70,000-a-year.

If King makes it to the end of his three year deal he’ll get a total of $1 million of free Myer shares if the stock price stays at the current 42 cents, but the rights will be worth even more if he can get the Myer share price up.

That remains a big if.