Myer executive chairman Olivia Wirth has brought in Boston Consulting to review retailer

Executive chairman Olivia Wirth has brought in Boston Consulting Group to examine and reimagine Myer’s approach to its customers, leaning on her admiration for overseas chains.

Myer executive chairman Olivia Wirth at the Sydney store. Picture: John Feder

Myer executive chairman Olivia Wirth has brought in Boston Consulting Group to conduct a company-wide review of the department store as she seeks to shift its focus to accelerating sales, widening margins, ramping up its loyalty program and improving its consumer focus.

BCG’s report is expected to be handed to Ms Wirth and the board soon and will be followed by an investor day later this year.

But already Ms Wirth and her management team are discussing key issues for the department store owner – from improving its women’s wear products to better competing with its traditional rivals as well as new online players.

Ms Wirth, the former loyalty boss at Qantas who took Myer’s reins in June, is setting a new agenda focused on “changing gears about growth” that builds on the solid work by her predecessor, former CEO John King, who stabilised the business through Covid-19 and returned it to profit.

Some within the Myer executive ranks are concerned, however, about the bills BCG will accumulate as it prods and pokes its way through the Myer business. They also question what value it can actually bring to the company’s operations.

There are rumours of Myer’s suppliers being tapped on the shoulder to contribute higher payments back in terms of rebates.

A spokesman for Myer declined to comment on BCG’s work and the looming strategy shift, citing a blackout in the lead-up to its earnings release later this month.

Myer executive chairman Olivia Wirth has brought in Boston Consulting Group. Picture: John Feder

It is believed internally that BCG is seen as giving Ms Wirth and her team extra bandwidth to look across the Myer business and all of its operations – from sourcing and private label fashion to stores and loyalty – while the Myer management team can focus on trading the business through key events such as Father’s Day, the upcoming Spring Racing Carnival and the crucial Christmas period.

In March Ms Wirth, who reportedly narrowly missed out on the top job at Qantas, emerged Myer after being named its executive chairman – a Myer role that hasn’t existed for 15 years – which gave her full authority to drive a new growth agenda. She is quickly making use of that power.

BCG was asked to reimagine the department store model and where Myer needs to be positioned in the next five to seven years as it faces ever-increasing challenges from new and more nimble online retailers, shoppers looking for value and loyalty benefits which will demand Myer pitches a distinct offer to consumers.

The BCG report could also set the groundwork for a potential transformational deal with its major shareholder, Solomon Lew’s Premier Investments, as Ms Wirth considers buying from Premier its portfolio of retail brands such as Just Jeans, Portmans and Jay Jays and which comes with 717 stand-alone stores and annual sales of $845m. That acquisition would be paid in the form of Myer scrip.

The focus on the opportunities in loyalty schemes will be a strong pillar for Ms Wirth and her management team who are eager to leverage its popular Myer One rewards program by extending it to cover Premier’s Just Jeans, Portmans, Dotti, Jay Jays and Jacqui E if they come into the Myer fold.

The BCG team of consultants, which could run up fees of millions of dollars for work, has been specifically tasked with addressing thinking about the future of Myer differently beyond just a traditional department store.

Meanwhile, in early discussions held within the Myer boardroom and among its top executives, Ms Wirth is also asking her team to “think differently” about the future of Myer as a retailer.

Although new to the retail sector, after spending 14 years with Qantas culminating in her six year role as CEO of Qantas Loyalty, Ms Wirth has begun to scope out big overseas department stores for inspiration.

Olivia Wirth wants Myer to “change gears” and think about where the business needs to be in the next five to seven years. Picture: Jason Edwards

She is keen to push Myer into a better and more experience-based beauty and fragrance delivery – much like that now led by British retailer Selfridges. She has also admired the resurgence of fellow British department store chain Marks & Spencer.

The loyalty program run by French department store Le Bon Marche is also a possible model for Myer as part of the next stage of the Myer One loyalty program.

If Myer eventually agrees to acquire the apparel brands from Premier – under which Mr Lew could swap Premier’s major stake in Myer for a direct personal stake in the department store – Ms Wirth would have more than 700 small stores under her control. She is turning her mind to successful overseas retail stores like Abercrombie & Fitch and GAP as to the possibilities for the Premier apparel brands within Myer.

But front of mind for Ms Wirth, and to be dissected by the BCG review, is how to ramp up Myer’s flatlining revenue line. There is agreement at the board level that the department store needs to break out of its holding pattern of annual sales of about $3bn, where it has been stuck for decades.

Underlining the almost-frozen state of its top line is the fact Myer hit sales of $3.285bn in its first year as a public company in 2010, and thirteen years later in 2023 its sales were $3.36bn.

There is also a general view among management that Myer needs to do better and more in women’s apparel – a key category for any self respecting modern department store – as well as grow its private label and exclusive brands portfolio.

Myer and other discretionary retailers face worsening trading conditions driven by higher interest rates, inflation, pressures on household budgets and a general spending pullback by consumers.

Last week Country Road Group, which owns brands Country Road, Mimco, Trenery, Witchery and Politix, said that it expected lower earnings in the near term. Its 2024 sales slumped by 8 per cent and sales for the first eight weeks of fiscal 2025 collapsed by 11 per cent.

Solomon Lew’s Premier Investments could do a deal that brings his brands into the Myer fold. Picture: Nicki Connolly

There were similar dour trading updates and results from other discretionary retailers such as online luxury fashion marketplace Cettire, jewellery chains Lovisa and Michael Hill. and footwear chain owner Accent Group.

Myer will report its full-year results on September 20 and although much of that result was generated under former CEO Mr King, the results will be presented to the market by Ms Wirth who will make her maiden appearance before analysts and investors.

It is expected that soon after Myer’s results, Premier Investments, which also owns sleepwear brand Peter Alexander and kids stationery chain Smiggle, will issue its annual results.

This could see an update on the proposed transaction to sell the Premier apparel brands to Myer in return for Myer shares which would then be distributed to Myer shareholders.

Mr Lew’s Century Plaza Investments company is the largest shareholder in Premier with a stake of 42.43 per cent. Separately, Premier has a 31.37 per cent stake in Myer.

If the deal were to be done Mr Lew personally would emerge as the largest shareholder in Myer and likely be offered a seat on the board.