Customer led offer paying off.
Beaming from the positive sales results for the half year, Myer CEO Richard Umbers said brands had been a key focus during the first half. In the past seven months, the company has rolled out more than 500 separate new brand destinations across its our store network including leading brands such as Seed, French Connection, Nine West and Mimco.
“TOPSHOP TOPMAN has been successfully launched in six stores, with more stores scheduled in the coming months. The brand opened in Bondi in November 2015 and has generated a positive ‘halo’ effect on trading elsewhere in the store, in particular across adjacent youth businesses,” Umbers explained
Umbers said that Myer had invested to lift customer service, by prioritising its Flagship and Premium stores, leading to well above-average sales growth and a significant improvement in its net promoter scores.
“Store management has led a program of low cost, high impact, targeted upgrades to their stores including improved visual merchandising, lighting, fitting rooms and other works. Myer has prioritised the allocation of team member hours to the busiest trading periods, taking advantage of the introduction of more flexible rostering,” he added.
The online business delivered strong revenue growth of 70% on the prior year with the growth in profitability exceeding sales growth. Umber said that this “impressive performance” resulted from its focus to deliver an improved omni-channel experience including an expansion of the in-store iPad service, strong take up of Click and Collect and upgrades to the myer.com.au site.
“The recent launch of the Myer eBay store which includes over 20,000 products, further extends the reach of the Myer brand, with 7 out of 10 Australian online shoppers already using eBay,” Umbers said.
Productivity step change
The company had also optimised the store footprint with its decision not to proceed with two planned store openings at Coomera and Tuggerah and also its recent decision to exit its Brookside store in January 2017. Progress has also been made to sub-lease vacated floors at the Support Office.
“Active discussions continue with all our major property partners, on a whole of portfolio basis, relating to total occupancy costs, space productivity, lease tenure and capital investments to support growth,” Umbers said.
Leadership and Outlook
Myers previously outlined program of Board renewal is continuing while a global search firm has been appointed to assist in the search for candidates with relevant experience.
“During the second half we will accelerate the rollout of New Myer initiatives leading to increased costs and capex. The increase in capex will include our major refurbishment at Warringah,” he explained, adding that, as previously outlined, FY2016 is a transitional year in which significant investments were being made in Myer’s future growth.
“On the assumption that there will be no significant deterioration in consumer sentiment, Myer now expects NPAT for FY2016 to be between $66 million and $72 million (previously $64 million to $72 million) excluding the impact of implementation costs associated with New Myer,” Umbers concluded.