Retail “Challenging” but Myer Plods On
Although business appears not to have radically improved since it released its earnings in March, Myer Chairman Paul McClintock is singing the onmi-channel tune to shareholders, providing a business update for the second half (H2) 2013.
“I continue to believe that Myer has a good strategy…providing a pathway for the business to achieve its potential,” he wrote in a letter to shareholders released to the ASX today.
However, “in the second half of 2013, we remain cautious about the trading environment.”
“Consumer confidence continues to be influenced by a myriad of external factors including cost of living pressures, as well as domestic and global political and economic uncertainty,” McClintock said.
However, Myer is committed to “pursuing opportunities to improve the business.”
Although he gave no growth indications for H2, recent earnings marked the third consecutive quarter of positive comparative sales growth, he noted.
In March, the retailer announced first half (to 26 January 2013) sales rose 1.7 percent to $1,73 bn compared to H1 12, and net profit of $87.9 million, up 0.7 percent.
“We continued to invest in improving the customer experience with additional service and efficiency initiatives,” Myer Chair said, adding “implementation of our omni-channel strategy continues to be a priority. “
New omni-channel initiatives recently introduced include Myer One smartphone app and One Wine Club.
“During the period we further strengthened our merchandise offer, with the introduction of new brands and the expansion of a number of established brands into new categories.”
Sales in Myer Exclusive Brands grew 10 percent to $343 million and represents almost 20 percent of sales, as it dropped less profitable categories in consumer electronics.
The high street retailer is continuing to “optimise our store network, successfully opening two new stores at Fountain Gate (Victoria) and Townsville (Queensland)” and will open a new store at Shell Harbour, NSW, this week.
A “significant opportunity exists for us to build on Myer’s strong brand, depth of range and extensive store network to deliver a seamless retail experience however and whenever our customers choose to shop with us. “
“We have already demonstrated good progress on a range of initiatives and we have a strong pipeline of further improvements underway.”
CEO of Grays Online, told CN last week big retailers like Myer would be one of the main players in the online retail scene going forward.
However, McClintock also made a call on the controversial GST “loophole”, saying:
“We continue to be frustrated by the duty and GST loophole that provides overseas online retailers with an advantage over local retailers.
“The internet has changed traditional retail and it is critical that reforms keep pace to ensure Australian businesses remain competitive. We appreciate the interest of State governments as they seek to claim the GST revenue being lost to them as a result of online sales to overseas retailers and look for a solution to be expedited ahead of the Federal election”
However, the trading update didn’t do much to entice shareholders, shares fell -1.02% to $ 2.91