King details Myer’s turnaround plan
Despite posting a $486 million statutory net loss earlier in the week, Myer’s stock price, at 57 cents per share at close of trade on Thursday, reached a six-month high.
This is compared to 42 cents per share at close of trade on Wednesday, after the company unveiled “disappointing” full-year results a month after management shake-ups and calls to refocus on the consumer.
Myer chief executive John King’s level-headed approach to reinvent the Myer brand seems to have gone over well with shareholders.
“It’s been 100 days since I started at Myer, which was just before the end of the financial year,” King said during the company’s investor call on Wednesday.
“I’m as positive about the future of Myer today as I was on my first day, when I spoke to team members in Doncaster.”
King’s whirlwind, ground-floor tour across Myer stores, of which he has 18 left to visit, has left a sizeable impact on the company’s direction moving forward – attuning King to the needs and wants of the Myer shopper.
“The customer’s message is simple: we want great brands, at good prices, with leading service whether that be in store or online,” King said. “We are acting on it.”
Having spent time listening to and speaking with customers, team members, suppliers, brand partners and landlords, Myer’s turnaround plan involves a three-pronged approach to better serving its customers.
Firstly, the department store looks to transform the customer experience across the business. This involves re-positioning Myer within the retail space, refurbishing and in some cases re-sizing stores, and focusing on resetting service standards.
One of the main issues vocalised by Myer customers to King is that there is never enough staff, and it’s hard to find a till that is open.
The group is experimenting with giving certain store more money to invest in staff to see what effect this has on customer satisfaction, and hopes in future to consolidate the stores till system to allow easier access for customers.
Secondly, the department store is going to focus more heavily on its ‘Only at Myer’ branded category.
“We will invest to grow Myer exclusive brands, with broader assortments and extensions to additional categories. We will build destination categories such as accessories, and exit selected categories where Myer is less profitable,” King said.
“We will add new brands that are exclusive to not only Myer, but to Australia where appropriate.”
One of the ‘categories’ Myer looks to exit from during 2019 is it’s clearance zones, which King notes he “hates”.
“I want to be clear: our focus is on profitability and we will not chase unprofitable sales just to hit a top line sales number,” King said, adding that the company didn’t want to sell a $10 note for $5.
Finally, Myer looks to refocus its online presence around a mobile-optimised store, giving customers an easier way to filter and search for Myer products, with King adding that the company is looking to make it the “number-one store” within two years.
“We will be leveraging our Myer One data in a much more efficient way to drive multi-channel customer engagement and growth, and we will enhance our efficiency and fulfilment operations through our DCs to improve profitability,” King said.
The new Myer website will be launched in the coming weeks.
According to King, a department store is only a winning format if it’s relevant to the customer, which is tied intrinsically to a strong online business.
“I think the opportunity for us is to actually grow the top line via online, stabilise the store portfolio, reduce the cost of operating those stores, reduce the space in those stores because we don’t need as much space, and then we’ll improve the profitability of the business, both in-store and online,” King said.
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