Myer’s new CEO, John King has visited Australia for the second time since his appointment as the struggling department store’s CEO, to lift the spirits of staff while he waits for his Australian visa to be approved.
The former House of Fraser Chief Executive has visited Myer’s head office in the Docklands, as well as the company’s stores in Melbourne’s CBD, Sydney’s CBD, Bondi, Warringah, and Chatswood, where he has reportedly told staff he wouldn’t be moving to Australia if he didn’t think Myer could succeed.
Sources told the Australian Financial Review that King has kept his plans for the embattled 118-year-old retailer up his sleeve, but told staff to prepare for operational changes and “challenges”.
Despite multiple store visits, King is yet to meet with Myer’s biggest shareholders, including Solomon Lew’s Premier Investments, Investors Mutual, and Dimensional Investments.
“He’s doing the right things in the right order,” an unnamed source told the AFR. “We are looking forward to hearing his plans and getting a better understanding of what he wants to do.”
King is replacing the department store’s previous CEO, Richard Umbers, who was forced to step down after downgrading the company’s profit guidance for the third time in less than a year.
Myer is set to announce the results of its third-quarter sales next Wednesday, however, it’s believed no formal conference call with investors will be hosted since the company doesn’t have an acting CEO to respond to any queries in King’s absence.
Analysts are predicting a fall in the retailer’s revenue for the sixth consecutive quarter, although foot traffic is expected to have increased over the quarter thanks to heavy discounting activity.
After the announced closures of approximately 53 Myer concessions in the last two weeks alone, including the likes of Esprit and Metalicus, King will also have to address issues with the department store’s supplier list, as well as declining sales when he steps into his role as CEO in a full-time capacity.
Myer is also expected to lose one of its more prominent wholesale clients, PVH Brands Australia after the company announced it will be shifting away from the department store model in light of rapid store closures and declining sales.
This move will see key brands like Tommy Hilfiger, Calvin Klein and Van Heusen start to create independent retail opportunities, moving stock out of Myer.
Myer has released a statement in response to growing concern over the pending closure of more concessions, saying the department store will make announcements in the coming months revealing how the business will be filling the voids left by Esprit, Metalicus and PVH Brands Australia.
“We are constantly in discussions with new brands to add to the Myer fashion offer and will make some exciting brand announcements over the coming months,” the spokesperson said.
Myer insiders are also allegedly intrigued by the surprise departure of Damian Walton, the general manager of merchandise planning, after only 10 months in the role since Walton reportedly worked with King during his reign at House of Fraser.
Sources told the AFR that King will likely recruit a new senior staff member to lead Myer’s 160-person merchandising team since he isn’t known for his merchandising expertise, but rather his operational knowledge.
According to figures released by the ABS reporting on March retail figures, department store trading fell o.5 percent in March and is only up 0.3 percent year-on-year.