Myer Holdings Limited today announced its financial results for the 26 weeks to 28 January 2017. While total sales declined the department chain saw significant growth in its online sales channel, up by 48 percent.
Myer delivered encouraging sales around the key trading periods of Christmas trading and the Spring Racing season which were offset by lacklustre sales resulting in modest comparable store sales growth for the first half, according to chief executive Richard Umbers. “This sales performance combined with a continued improvement in the cost base led to a 5.3 percent increase in net profit after tax to $62.8 million.” Overall sales were down by 0.6 percent however.
Despite its subdued overall sales, the Myer reported sizeable growth in its online sales, which increased by 48 percent. Umbers attributes its strong e-commerce performance to improved customer experience amongst other factors.
“Our omnichannel business continues to grow, with our online business growing sales by 48 percent due to a much improved customer experience online. This together with significant improvements in pick, pack and fulfilment contributed to another half of profit growth ahead of sales growth.”
Myer is currently in its second year of its five year turnaround plan. Umbers says in its next phase of transformation Myer will deliver on a number of key omnichannel initiatives to support future growth.
“We are 18 months into our five year transformation and I am pleased with the progress we have made. We are a better and stronger company as a result of the New Myer strategy.”
“As we enter the next phase of transformation, we are delivering on a number of longer term initiatives to support New Myer including an improved omnichannel offer and a productivity step change. To support the business into the future, we are also focused on ensuring we have an efficient and sustainable operating model in place,” explains Umbers.
The company says that it will continue with its store footprint optimisation, following its recent closure of three stores including Wollongong, Brookside and Orange. Myer says it also plans to cut back on a third of its physical space at its Melbourne support office at 800 Collins Street. That could likely mean job cuts.
“We continue to make good progress in developing a simplified business model. This is demonstrated by the rollout to stores of a workforce management system, more simplified administration processes for store back office and the appointment of external providers to manage our customer support centre and digital services,” adds Umbers.