Myer Profit Plunges: Transformation Plan Revealed
In releasing its full-year results today, Myer additionally announced the launch of a fully underwritten entitlement offer to raise $221 million to assist in its transformation plan, which it stated will be underpinned by a more than $600 million investment.
Myer booked one-off costs throughout the year of $61.7 million relating to its strategic review, including $24.5 million related to two store closures at Top Ryde and Hurstville, impacting its bottom line net profit after tax of $29.8 million.
Myer’s underlying net profit after tax of $77.5 million was down 21.3 per cent year-on-year.
Total sales were up 1.7 per cent to $3.196 billion, and were up 1.1 per cent on a comparable store sales basis.
“Myer’s FY2015 result supports the case for our comprehensive change agenda,” Myer chief executive officer and managing director Richard Umbers commented.
“The decisions we have taken to deliver ‘New Myer’ will lead to changes to both our store network and operations, resulting in a more productive and efficient footprint.”
The $600 million investment represents $480 million in capital expenditure and $180 million in implementation, with Myer stating its strategy is founded on advanced data analytics of its customer base and store catchments, building a profile of customers where “there is the greatest opportunity to improve the customer experience and deliver higher sales and profit”.
“From this analysis, we have identified the necessary actions to make Myer’s stores, range and services more attractive to our primary customers who shop at Myer,” Umbers commented.
Among Myer’s initiatives, it will devote around $100 million in capex and implementation costs to omni-channel shopping, enhancing the omni-channel experience, while other initiatives will involve rolling out digital hubs and Wi-Fi.
Myer stated that the 2016 financial year will represent a “transitional year”, stating it expects net profit after tax to be in the range of $64-72 million, excluding the impact of implementation costs associated with New Myer.