Lew lays down Myer plans

myerPremier Investments chairman Solomon Lew has laid down his plan for the turnaround of Myer, detailing a seven point plan to shareholders ahead of the department store retailer’s AGM.

In a letter, the retail veteran also criticised Myer’s chairman-elect Garry Hounsell for “his now-infamous letter” to shareholders which claimed that Premier had not named the two Premier independent directors and one external independent director it put forward join the Myer board to assist in turning the company around.

Lew claimed each nominee was discussed in detail at a meeting with Hounsell, with Premier nominating former Myer managing director Terry McCartney, former UBS MD Tim Antonie and current chief investment officer of Abacus Property Group Steven Sewell to address specific aspects identified by the veteran as critical to Myer’s turnaround.

McCartney is an independent, non-executive director of Premier, previously serving as MD of Myer Grace Bros where he “led year-on-year growth in profitability of Australia’s largest department store, the culmination of which was Myer delivering in FY2000 $3.67 billion in revenue, and $148 million in profit.”

Antonie “was put forward to assist the Myer board on its balance sheet issues, and to address its poor track record of value-destructive acquisitions such as Top Shop and Sass and Bide; while Sewell, formerly CEO of Federation Centres before the $12 billion merger of Federation Centres and Novion to form Vicinity Centres, was nominated because “there is no-one better able to assist the Myer board in dealing with its obvious property and lease liability issues than Mr Sewell.”

“Myer’s long-dated leases in non-performing centres are one of its key issues, and it currently lacks the experience and ability to address this issue at board level,” Lew said.

“Myer is simply waiting for leases to expire, but it needs a property management expert at board level to help it expedite a solution for the benefit of Myer shareholders.”

Premier also said it had named two directors to represent it on the Myer board, equalling a total of 20 per cent of a ten-member board, and named and proposed a further independent director not related to Premier in any way, in response to “the falsehood that Premier has requested 43 per cent of the seats on the Myer board.”

Seven point plan

Premier outlined its plans for Myer’s turnaround, beginning with the appointment of directors with retail experience to “return the business to sales and profit growth” and “address its poor acquisition track record, and stop it from repeating the mistakes of Top Shop and Sass and Bide, where clearly there was deficient due diligence and strategic thinking involved.”

The plan includes a focus on returning service levels ‘after Myer stripped back the hours of experienced staff on the shop floor’ and the closure of “the disastrous clearance floors,” dubbed “a blight on the Myer name.”

“Myer cannot get out of its troubles by becoming a second-hand store. The stock in the clearance floors should be written off as some of it is approximately 3 years old.”

Lew also hit out at “the loss of talented retail executives” and said to “get rid of the consultants.”

“Consultants do not know retail, they know consulting. Myer needs retailers who know the business from the shop floor up, as well as experienced, solutions-focussed businesspeople who can tackle their key issues.”

“Hounsell might sneer at Premier’s so-called “rag trading mentality”, but the object of retail is to trade, not to stockpile old merchandise that no-one wants for years and then dump it on the market via “clearance floors”.

“Experienced retailers know what customers want because they listen to customers and deliver on their needs. They then know how to source that product from the leading manufacturers and how to range it profitably. If that’s “rag trading”, then so be it.”

Premier added the closure of non-performing locations should be accelerated but said “Myer simply  lacks the nous at board level to find solutions with its landlords.”

Myer said the statements from Premier Investments “demonstrates their agenda of disrupting Myer at a critical time of year when our focus is on serving our customers through the busy trading period, and delivering on our new Myer strategy.”

“Nothing in today’s statement changes the fact that Premier Investments is one of Myer’s biggest competitors and suppliers. No one would expect Woolies to invite Coles onto its board,” said a spokesperson for the department store retailer.

“Myer directors urge shareholders to vote for all resolutions to ensure an independent, conflict free, Myer.”

Myer’s AGM will be held on November 24.

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  1. Peter posted on November 9, 2017

    Solomon Lew is absolutely correct, get back to basics and then take it from there, you need the retail people at board level to be able to give the public what they want, when they need it and stay a step ahead of the competition. Also Solomon Lew would have a vested interest as a supplier and shareholder as well. The Myer board has been floundering for years, I know who my confidence is with.

    • Terry O'Neill posted on March 9, 2018

      As a former proud employee of Myer I feel the need to express my disgust at some things I have read about and observed on the company that at one time represented everything that was retail in Australia. Political infighting combined with the latest re launch attached to a new slogan will never fix the problems or the decline of this once great company. As my time at Myer was coming to an end I longed for the latest redundancy package and was delighted when I was successful and walked out of that store a very happy person. The reason I mention this fact is that I am not writing this letter with an ounce of animosity or dislike for the company. I enjoyed many good years at Myer and learned a lot about business from some excellent operators. In my time with the company and for all our faults and there were many, there was also a degree of pride and commitment regardless of your position. How sad it was then to visit Myer Chadstone recently and have one of the most dis appointing experiences. I arrived as the doors open on Sunday and the state of menswear was disgusting with stock thrown everywhere from the might before. Not a staff member in sight. Shirts, ties trousers lying where they were left with no thought or appreciation for the stock or customers. I finally found a pair of trousers and headed for the fitting room and I can hardly open the door for the stock lying on the floor. I lost count of the items and the hangers everywhere. Finally I cleared a space and decide I needed another size and to my surprise I find a rep from a well known brand willing to help. He informed me that it is like this most weekends and that is why he is sent by his company to merchandise. My heart is really sinking by now to see the awful mess and still there is no urgency from anyone to clean up. 30 minutes has passed and a manager I recall from my days has just walked past and totally ignores the mayhem that is menswear. I watched a customer try on clothing in a corner of the department as he obviously refused to use the fitting room. My struggle has left me frustrated and sad as I head for the shoe department and question as to why I am putting myself through this. No, the shoe department is no better so my survival skills kick in and I head fro the payment counter. The lady in front of me whispered to her friend" please get me out of here, this is awful". While waiting I observe another manager appear on the floor showing no interest or concern however very keen to lean against a fixture and chat to someone. My next encounter as I was leaving was with a sales team member, yes one finally appeared. I worked with this person some years earlier and when I told her of my experience she informed me that this is the new Myer. "No staff, no morale, no standards, and no care.". Her saddest comment was that she now hates telling people that she works for Myer. As I sat drinking a well earned coffee I could not help but feel a great sense of sadness and dis appointment at her comments and on my experience on that morning which was living prove that what she expressed to me was true. I have read many articles from Myer about relaunching this or a new strategy on that. We are then shown another "new face" who arrives with a great new title. Yet the company continues to go down the path of decline. I wonder why, or better still just ask a staff member. Do they really think that these carefully orchestrated pr stunts will lift staff morale when they see no change time after time and watch another new strategy sail past without a positive result. In my humble opinion the road to recovery starts with a march of the store manager directors and board though the store. Then a few questions must be put to the entire group. 1. How can you expect customers to support you when you present your flag ship store in this state.. 2. How can you expect totally inadequate floor staff numbers to do their job properly. 3. Where are your managers leading the floor team and preparing the store for business.in this so called flag ship store?.. The on line shopping excuse has only cemented in many peoples eyes the fact that Myer have last the plot and what everyone could see coming for years somehow escaped the boardroom. I for one get totally sick of these so called retailers or business people on the board looking to blame everything and everyone but themselves. When was the last time you actually walked through a store at 10 am, any store. Stop your infighting and go talk to the people you employ who will really tell you the truth, the floor team. They will give you the most honest answer you need as long as the politically correct hangers on don't nobble them first. I know what I am talking about here as I once had the opportunity to have what was referred to as an open and honest group discussion with a new director. We were then told by a group of more senior black suits to present our questions for vetting beforehand. I promptly declined and took no part in the so called, "open discussion". Its time Myer had an injection of honesty and integrity, I firmly believe these two attributes have not been lost forever. Who is game is the question?.

  2. PD posted on November 9, 2017

    I am not a Myer shareholder, however I am a customer. The technicalities of bringing the business back on track is something that needs to be done by grass roots retailers. As a customer of Myer since the Grace Brothers days, I don't go into Myer any more, I have had many episodes whereby I have gone in and chosen products and then walked around the floor trying to find someone to take my money. It is ridiculous. Believe me, David Jones isn't very far behind. Why do they spend so much money to entice me into the store and then make it hard for me to shop? They are both sowing the seeds of their own destiny, ignore the customer at your peril.

    • Sonja posted on November 11, 2017

      I totally agree with this. Many times I go into Myer and its hard to find anywhere to purchase the item. So many counters are left unattended and you walk around trying to find somewhere to purchase it from. You cannot ever get anyone to help you or ask a question . The most service you get is from someone in the cosmetics counter as they seem the most staffed. I also find the stores so cluttered that you get overwhelmed and you end up not buying anything because theres too much. You have to get back to the basics. Customer service, staff that actually have knowledge of their departments and staff to serve you on the registers in that department. Most people in top executive positions in retail probably have never worked a day in their life on the shop floor. Make all big bosses do at least 3 months on the shop floor so they actually can see where the problems are.

  3. Gerald Simenson posted on November 10, 2017

    It's very basic. As Solomon Lew says: Listen to your customers, know what they want, source it and range it profitably. That's retailing.

  4. Jeanette Bennett posted on November 16, 2017

    Myer should stop discounting, provide the customers with brands that are not elsewhere in the country, in particular at their front door! Why would Myer stock Country Road, Witchery etc when they have their own stand alone stores just steps from Myers front door? The World is full of brands that are not represented in Australia. Come on Myer, have a point of difference!

  5. Jeff Withers posted on November 18, 2017

    Myer are destined for a bleak Christmas which will confirm what Solomon Lew has been spruiking over the last few months, "there are no retailers running this business" . A walk through 3 local Myer stores last week showed stores that were not prepared for the Christmas trade through lack of correct merchandising, lack of stock and a lack of guidance by upper management. It is abundantly clear that those running Myer are doing it from behind their desk's. if they were out on the shop floor they would be asking why their Christmas Giftorium 7 weeks out from Christmas was not fully stocked, why stores were persisting with $2 clearance tables in main aisles, why staff did not have the correct information on what their store actually stocked. The Myer decision to turn stores into clearance outlets is the first step to retail oblivion and if not checked will lead this business into a hole that will be even more difficult to climb out of. The New Myer that was hailed by the current board as the way forward? - well no one including staff and customers know what it is!. The only thing the Myer management group will succeed in will be the downward spiral of the share price post Christmas.

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