A new Myer strategy has been unveiled today on the back of the department store’s FY15 results, promising Myer will ‘find wonderful’ after an ordinary year.
A new Myer strategy has been publicly announced today as the department store paints its vision for a positive future following a year where net profit after tax dropped 21.3% to $77.5 million. Sales grew marginally (1.7%) for the year to $3,195.6 million, but the cost of doing business rose faster at 3.3% to $1,067.2 million.
“Myer’s FY2015 result supports the case for our comprehensive change agenda,” said Myer CEO Richard Umbers, who took the reins in March this year. “The decisions we have taken to deliver New Myer will lead to changes to both our store network and operations, resulting in a more productive and efficient footprint.”
The new Myer strategy sets out a five-year plan to invest more than $600 million in improving productivity, re-energising the range, improving the in-store experience, and delivering market-leading omnichannel capability.
“The New Myer strategy is built on providing a more focused and relevant merchandise offer to serve a more valuable customer and a better shopping experience for everyone who comes to our stores,” said Umbers.
Key elements of the strategic review include:
$150 million investment in an enhanced customer-led offer
$150 million in delivering ‘wonderful’ through improving customer experiences, upgrading stores, more digital hubs and Wi-Fi, and bringing in more dwell spaces (cafés, restaurants, etc.) in priority stores
$100 million to be spent on the omnichannel experience, increasing click and collect as a proportion of sales and reducing fulfilment costs by 35%
$200 million to be invested in productivity across the Myer store network
The optimism about the future draws upon the performance of the department store category globally, with truly omnichannel retailers like Nordstrom (US) and John Lewis (UK) well outperforming the compound annual growth rate (CAGR) of the Australia counterpart.
The online business was a shining light for Myer in FY15, with sales growing 80% in the past year coupled with improved profitability. The use of iPads in-store contributed $20 million in sales in the first 11 months, while click and collect has grown at 183%, albeit off a low base since it was introduced.