Australian ports slowing us down, says Myer chief executive John King

Myer boss John King has backed claims Australia’s ports are among the worst in the world with bottlenecks and inefficiencies.

Myer boss John King: ‘We are watching closely and we are concerned about what is happening in terms of container ships and I think at the ports it’s a problem that will continue well into next year.’

Myer chief executive John King has become the latest chief to hit out at the nation’s crippling ports problems, warning that poor productivity and bottlenecks made worse by Covid-19 are likely to continue well into next year.

Speaking at Myer’s annual general meeting on Thursday, where the retailer’s board received a second strike against its remuneration report, Mr King also said he was concerned about rates for container ships, which had rocketed almost seven-fold in price since Covid-19 began, while transport slots were increasingly difficult to secure.

Mr King noted a study released this week by the competition regulator that revealed the worsening productivity and overall performance of key ports such as Port Botany and Melbourne, and which showed the nation’s ports were ranked almost the worst out of 351 global ports.

The Australian Competition & Consumer Commission review also shone a light on skyrocketing container costs as well as industrial disputes that, combined with disrupted supply chains, were causing headaches for importers, exporters and especially retailers, threatening economic recovery from the pandemic.

“We are watching closely and we are concerned about what is happening in terms of container ships and I think at the ports it’s a problem that will continue well into next year,” Mr King said.

He reassured investors at the AGM that Myer had sourced more than enough product for Christmas and was in a strong inventory position for next year, helped by the fact it relies less on imports than many other retail chains.

Meanwhile Myer, like many other retailers, could be in for a bumper Christmas period – as long as there were goods on the shelf – with the department store chain’s chairman, JoAnne Stephenson, telling investors store sales were up 35 per cent for the first two weeks following the end of lockdowns in NSW.

“We’ve seen strong trading in NSW stores since they reopened with department store revenues up 35 per cent year on year in our first two weeks – showing the positive response from our customers to stores being open again,” she said.

However, Mr King later noted that sales at the retailer’s flagship stores in CBD locations remained subdued.

Myer, like many other retailers, could be in for a bumper Christmas period – as long as there are goods on the shelf. Picture: NCA NewsWire/Bianca De Marchi

Later at the meeting, major shareholder Solomon Lew, who has fought a bitter and public battle with the Myer board for four years, exerted his pressure on the company by helping deliver a second strike against its remuneration report.

Mr Lew, Myer’s biggest shareholder with a stake of 15.77 per cent, was able to also deliver a sizeable 30 per cent-plus vote against the election and re-election of Myer directors Ari Mervis, Jacquie Naylor and David Whittle. But it was not enough for Mr Lew to eject them and put in place his own directors.

Ms Stephenson said votes lodged before the meeting resulted in a 37.1 per cent vote against the remuneration report. This gave Myer a second strike on the remuneration report, having easily cleared the 25 per cent level for a strike.

The conditional spill resolution failed to pass, with lodged votes revealing a 62.5 per cent vote against a spill meeting.

Mr Lew had representatives that asked questions at the virtual AGM and Ms Stephenson was also pushed on the issue of Myer working with Mr Lew, who is also a major supplier to the ­department store.

But Ms Stephenson said Myer would not be shaken from its principles, which included a majority independent board.

“The Myer board remains open to constructive dialogue,” she said.

“In engaging in any such dialogue, the board has been and will continue to be focused on some key underlying principles, including the majority independence of the board at all times with an independent chairman and proportionate and appropriate representation.

“I note that Premier made the choice not to nominate any ­directors for the consideration of shareholders at this AGM.”

Mr Lew has been threatening for months to produce his own list of candidates for the Myer board, but has yet to release the names of people he is seeking to go on the retailer’s board.

Meanwhile, Myer could be considering a divestment of its online or loyalty program assets, following the lead of many other overseas retailers and department stores that have unshackled their digital businesses.

Ms Stephenson signalled in her AGM speech that Myer could attempt to harvest more value from its online and digital assets, but did not declare the businesses could be spun off or demerged.

However, it is now investigating several options.