The retail sector appears to be floundering, and even though Myer is among those affected, CEO Bernie Brookes says he sees light at the end of the tunnel.
Despite forecasts of flagging sales, dipping profits and potential job losses, Myer Chief Executive Bernie Brookes says that the sector has ‘bottomed out,’ expressing optimism for the future of his business.
Myer recently revealed that for the period of six months ending in January, the company saw a fall in net profit of nearly 20 percent. Total sales value fell 1.7 percent to $1.704 billion.
However, Myer is hardly the only company stricken by difficult circumstances. Other bricks-and-mortar businesses are reportedly doing it tough, with David Jones, JB HiFi and others posting slipping sales figures. Things are so bad that the National Retail Association commissioned Ernst and Young to conduct a study that projects future job losses in the industry.
The study predicts that, of the 1.3 million Australians currently working in retail, 118,000 will lose their jobs over the next three years, costing the economy $6 billion. The National Retail Association believes that these job losses will occur due to competition with online retail and has called back into question the GST threshold debate once more.
Ernst and Young Economist Dr David Cochrane says that other countries have tax-free thresholds that are far lower than in Australia.
“The UK has recently reduced its threshold from 18 pounds to 15 pounds,” he told ABC television.
Despite these predictions of doom, Brookes believes that potentially the worst is over for Myer, at least. In the three months to the end of January, and for another six weeks afterwards, sales were only down 0.4 percent.
“We’ve bottomed out, water’s found its level and now hopefully it’s onward from there,” he told Business Spectator.
Brookes points to Myer’s $13 million in increasing staff hours, saying it led to a boost in sales in Western Australia and South Australia. He also said that the company plans to push in-house brands more, to make better use of retail spaces, offer fewer markdowns, revamp the loyalty program and open new stores.
There is also a general sentiment that if Myer can compete online, then it will be much more likely to bounce back from recent losses. Brookes confirms this, pointing out that many international department stores were successfully integrating their online and offline businesses.
“I’m not a dinosaur, I’m quite comfortable that we’re riding something that’s got a very good, strong future,” he said.