Despite progress made with its Customer First Plan, Myer has reported a 3.8% decline in total sales and 36.5% drop in statutory profit to $24.4 million for the 26 weeks ended 25 January 2020.

Sales were impacted by a continued focus on profitability, lower foot traffic, exit of Apple and Country Road Group brands and disappointing performance in womenswear, which offset increased gross profit for menswear, homewares and childrenswear. Myer is currently in the process of rebuilding the womenswear business under new leadership and new design teams.

Online sales grew 25.2% to $168.2 million, now representing 10.5% of total sales, with an expanded range and improvements to checkout and Click & Collect. During the four-day Black Friday sales period, online orders were up more than 100% on the previous corresponding period.

Myer CEO John King said the result demonstrates a continued focus on profitable sales, a discipled management of costs and cash, and strengthening the balance sheet.

“Achieving growth in EBIT despite a deterioration in the operating environment during our peak trading period validates the Customer First Plan and illustrates the progress made to date. Sales were impacted by a number of factors…Pleasingly, there was continued strong growth in online sales, despite the exit of several low margin brands.”

Myer continues to reduce costs with an enhanced in-store staffing model, reduced store occupancy and improved processes and efficiencies, which resulted in a reduction of management and administration roles primarily in the support office.

“We are working with our landlords via a portfolio partnership approach to reduce our footprint and refurbish stores to transform the customer experience, while delivering material cost savings,” King said.

The refurbishment of the Myer Cairns and Belconnen stores is due to be completed by November 2020 with an enhanced appearance, layout, adjacencies and introduction of new and exclusive brands. Lease extension and store upgrades have also been agreed for Myer Albury and Ballarat, while the refurbishment of Myer Karrinyup has commenced and is scheduled for completion in August 2021. Myer is due to exit level four of its Melbourne Emporium store this month.

While King is encouraged by the department store’s progress, he said there is still considerable work to do and anticipates the challenging macro environment to continue in the second half with the impact of the coronavirus on store traffic uncertain.

“The supply chain impact of coronavirus is currently being managed by our teams in Hong Kong and Shanghai. The team are focused on mitigating the impact of delays to the planned delivery of merchandise.

“We have a clear plan to address the underperformance in womenswear with new management and a strengthened design team for Myer exclusive brands, with improvements not anticipated until FY21. Numerous opportunities remain to improve productivity and further reduce costs particularly in the areas of store occupancy, factory to customer and fulfilment for both stores and online.”