Myer boss upbeat about looming Christmas peak despite economic challenges

Myer boss John King won’t let higher interest rates and geopolitical risks be the Grinch for the retailer.

Myer CEO John King and incoming chairman Ari Mervis in Melbourne before the AGM. Picture: NCA NewsWire / Ian Currie

Myer chief executive John King has told shareholders at the department store’s annual general meeting in Melbourne that the retailer was well positioned for the current economic environment, with the last seven weeks of trade delivering an improving trend in an otherwise challenging market.

Also at the AGM incoming Myer director Olivia Wirth was forced to defend her time as the former loyalty boss at Qantas as one shareholder questioned her about her time at the airlines, its dismal treatment of customers and the damage that had wrought on the Qantas brand.

Although Myer chairman JoAnne Stephenson attempted to steer the meeting away from discussing the brand and reputational issues now dogging Qantas, which happened when Ms Wirth was one of the airline’s most senior executives, Ms Wirth was forced to defend her experience and what she could bring to the Myer board if elected.

Meanwhile, addressing shareholders in his CEO speech, Myer boss Mr King said same store sales growth for July 30 to October 28 was down 0.9 per cent compared to down 0.2 per cent between September 10 and October 28. However, this was an improvement on the 1.9 per cent fall in sales growth for July 30 to September 9.

“The last seven weeks of Quarter 1 saw an improving trend; but we remain cautious with our peak trading period still to come,” Mr King said in reference to the crucial Christmas and new year sales that traditionally drive the bulk of the department store’s profitability for the year.

“We are focused, well prepared and have a clear plan to capitalise on the Christmas peak trade and the remainder of the year despite the uncertain economic outlook.”

Mr King said Myer was “well prepared” for the Christmas trading peak as it developed strong plans across in-store and online with it well-stocked to capitalise on both the Christmas and Black Friday period.

There were also key marketing and promotional activities to be unveiled, such as the famous Myer windows at its flagship store in the Melbourne CBD.

“(We) Will continue to create more value for our customers through Myer one and our strategic partnerships with specific opportunities tailored across the peak period.

“The Melbourne Bourke St windows will feature an exciting iconic Australian experience that will delight customers and create excitement, complementing our Santaland, Giftorium and personalisation experiences that will be showcased nationally.”

Myer is upbeat about the Christmas trading season despite economic challenges. Picture: NCA NewsWire/Sarah Matray

Mr King told shareholders that Myer’s customer first plan, which has been instrumental in the operational resurgence and vast improvement in Myer’s profits over the last few years, has been, and continued to be, the right plan and that has also underpinned its performance in fiscal 2023.

“Our investment in new brands, technology, our multichannel capability, supply chain and stores will continue to drive greater customer and commercial impact. We continue to provide deeper customer value at a time when customers need it through loyalty and points plus pay partnerships, providing us a key point of difference.”

Myer recently unveiled its full-year results, reporting a 12.5 per cent lift in total sales to $3.36bn, its highest level since 2005, with net profit of $71.1m, up 18.2 per cent, and up 109 per cent against 2019, pre-Covid.

Mr King told shareholders its Myer One loyalty scheme had 7.3 million members, up 10 per cent year on year with 2023 representing a record year for Myer One engagement, new customer acquisition and active customer numbers.

Meanwhile in her address, outgoing Myer chairman Ms Stephenson has told shareholders at the department store’s annual general meeting in Melbourne that the board is progressing with a search for a new chief executive to replace current boss Mr King who plans to step down next year.

“The board is well-advanced in the search for a replacement CEO for John King, with interesting candidates both locally and internationally,” Ms Stephenson said.

In addition, Nigel Chadwick has advised that he will be retiring from his role as Myer’s chief financial officer in early 2024, with the finance boss to be replaced by deputy CFO Matt Jackman.

In lodged votes before the AGM reported to the ASX, there was an 18.51 per cent vote against the election of businessman and veteran company director Gary Weiss to the board, although he will still be elected, while former Qantas executive Ms Wirth received 99.18 per cent vote in favour of her election. Both candidates are supported by Myer’s largest shareholder Solomon Lew’s Premier Investments. There was also a 97.74 per cent vote in favour of the remuneration report.

At the AGM Ms Wirth was forced to defend her time as the former loyalty chief for Qantas, over which time the Qantas brand was ruined by a number of scandals including allegations it sold tickets to 8,000 cancelled flights - or ‘ghost flights - with the subsequent outcry and complaints from customers seeing Qantas’s reputation sink.

Ms Stephenson, who will be replaced as chairman by Myer director Ari Mervis, told shareholders the Myer AGM wasn’t the venue to discuss another company but she allowed Ms Wirth to address a shareholder question over her time at Qantas when the resolution to elect her as a director came before the meeting.

One shareholder was concerned Myer’s brand could suffer the same fate as Qantas, and he asked Ms Wirth what lessons she had learnt at her time at Qantas during its tumultuous and tortured performance of late.

“You are absolutely right, the Myer brand has performed incredibly well over many years and as has the Qantas brand,” she said before she was interrupted by a shareholder from the floor of the AGM.

Ms Wirth said it wasn’t the time and place to talk about Qantas but agreed there had been a significant period where the Qantas brand and Qantas had let down its customers, which it has apologised for.

“But I am not here to talk today about Qantas, I am here today to talk about the role I believe I could play with Myer given my significant background and experience.”

On Wednesday Mr Lew’s Premier Investments, the largest shareholder in Myer with a stake of 28 per cent, said it was supportive of Myer’s efforts to refresh the board, led by the recent appointment as Mr Weiss and Ms Wirth as directors.

Myer CEO John King will step down from the retailer next year. Picture: Supplied by Myer PR

“The proposed new independent directors bring strong commercial, property and loyalty credentials which can only benefit Myer and its shareholders. Premier has voted its proxies in favour of the election of Gary Weiss AM and Olivia Wirth. We have also voted in favour of the re-election of Ari Mervis,” Premier said.