Myer Calls Crisis Talks As Summer Weather Kills Heating Sales
Among the retailers facing pressure are Harvey Norman, Bunnings, Masters, Bing Lee, The Good Guys, Myer and David Jones.
The situation is so bad that Myer and shopping centre landlords, are holding crisis talks this week to discuss how to deal with unseasonably warm weather that has left them struggling to move winter stock including heating appliances.
A Harvey Norman store owner said “We had one small cold snap last month and that was it, we are now sitting on millions of dollars’ worth of stock. By this time of the year we should have seen a steady ramp up of heating appliance sales, instead the stock is sitting on the floor and in warehouses”.
At Bunnings stores in NSW the electrical department is packed with heaters at Isle ends as the Hardware Company fails to shift tens of thousands of heaters.
In the past three years, end of financial year discounting has started on June 1, but with warm weather in NSW and Victoria beating May records, sale signs are already in shop windows.
Fairfax Media said that for some retailers, especially those reliant on the snow season, a sale sign may be seen as a white flag.
A saving grace has been the booming residential sector, which has helped furniture and home-related sales.
A spokesperson for Myer confirmed its directors were meeting today, Monday to discuss when to start the sales period.
The chief executive of the Australian Retailers Association, Russell Zimmerman, said the warm weather was playing havoc across the retail sector.
”This is having a huge impact on retail turnover, margins and stock holdings,” Mr Zimmerman said.
”It’s being felt across the industry, from those selling winter coats and boots, to the kitchenware’s business, such as soup makers and crockpots, to electric blankets and heaters.
”Even if we get a sharp cold spell, most people will now wait for the sales to buy new items that they may only use for a couple of months.”
Mr Zimmerman said the weather would also cause stock holdings issues, given that most fashion retailers look to buy spring and summer clothes in the coming month.
”If there is excess stock that hasn’t been sold, that will force the retailer to have clearance racks in the shops, which is never a great solution,” he said.
The impact will also be felt at the investor level, with revenue down in the June quarter.
Craig Woolford, a retail analyst at Citi, t6old Fairfax media that the current weather has had a significant impact, not just on a company’s bottom line but also on investor sentiment.