Olivia Wirth promises to establish Myer as a ‘retail powerhouse’ amid profit hit

Myer boss Olivia Wirth is confident she has the new growth strategies in place to establish the 125-year-old department store as a retail powerhouse amid tough trading conditions.

Unveiling a $20.1 million slide in interim profit to $30.4m and flat sales of $1.83 billion, Ms Wirth on Wednesday said Myer’s growth plans were now being executed following the completion of a strategic review announced last June.

Ms Wirth said the growth strategy would start delivering results in the second-half as it integrates the Just Jeans, Jay Jays, Jacqui E, Portmans and Dotti brands it recently acquired from Solomon Lew’s Premier Investments.

Myer has also announced the refinancing of its debt facility, which is expected to save $3m in the second-half and $11m annually.

“We’re just very focused now on really getting the basics right so that we can focus on building the Myer Group into the retail powerhouse that we believe it can be,” Ms Wirth said.

The former Qantas loyalty boss last week announced sweeping changes to Myer’s executive team and the restructure of struggling in-house brands Sass & Bide, David Lawrence and Marcs. The restructure has already resulted in the closure of 10 standalone Sass & Bide stores.

Earnings before interest and tax fell to $85.1m in the 26 weeks to January 25, from $117.5m a year ago, which Myer said was impacted by implementation issues at its new distribution centre in Victoria.

The retailer said the facility was not yet operating as designed, with stock issues resulting in $12m in lost earnings in the first half.

Myer’s half-year results did not include Apparel Brands. The deal — which grows Myer from having 56 outlets to 783 shops in Australia and New Zealand — was completed on January 26.

Ms Wirth said Myer and Apparel Brands stores would “happily co-exist in many centres across Australia” when asked if customers could expect closures to remove duplication.

“Equally, there are also cities, towns and regions where there may be a Myer but there might not be Apparel Brands, so that’s where there could be an opportunity,” she said.

Ms Wirth — who was appointed as executive chair of Myer a year ago — called out the strong performance of the Myer One loyalty program among the segments that worked well over the first half.

Myer said the loyalty program’s engagement over the half was the strongest since its inception in 2017, with active customers growing 6 per cent to 4.6 million.

“We have a highly engaged Myer One customer,” Ms Wirth said, adding 79 per cent of total sales were generated by a loyalty program member.

“What we’re excited about is rolling out the Myer One program across the Apparel Brands.”

Ms Wirth said this was a great opportunity for Myer from a business perspective as it gave the retailer insights into where customers were shopping, but it also encouraged “cross shopping”.

“What that means is the Dotti customer today, she’s shopping for make up somewhere, so through Myer One how do we encourage her to be buying her lipstick, her blush, her homewares . . . within Myer.”

Myer revealed the tough trading conditions continued into February and March, with sales in the first five weeks of the second half down 2.6 per cent compared with the prior corresponding period.

Ms Wirth said the retail environment remained unstable, with consumers still cautious.

“What you see is promotions playing a really important role in driving consumer behaviour, they’re more discerning about their purchases,” she said.

“They’re also looking for newness. For us, we’re really focused on making sure that we can offer the right products.”

Asked if there were plans to open more Myer stores, Ms Wirth said she was focused on enhancing the customers’ in-store experience.

“We will start on a store renewal program which will look to improve and change our in-store experience,” she said.

Ms Wirth also flagged plans to return to Brisbane CBD after announcing in March 2023 it would close the flagship Queensland store after more than three decades.

“We think it’s a great opportunity and that is a market that we believe that Myer can play a really important role (in),” she said.

“There is an appetite for having Myer back in the CBD and that’s definitely something that the team is working towards around what is the right space.”

Myer will hold an investor day on May 28 to provide more details about its strategy.

Myer shares closed down 1.3 per cent at 75¢.