Myer’s new chief executive John King will spend at least two days of every week in stores serving customers and consulting with staff as he works to turnaround the fortunes of the struggling department store.
King spent his first hours in the job on Monday morning giving staff in Myer Doncaster a pep talk before hitting the floor and talking with customers.
While many new executives spend time consulting with shareholders and middle management at head office, King said his retail philosophy was founded in putting the customer first.
“We have to put the customer first – in every decision we make and every action we take,” he said.
King has just taken on what is considered to be one of the toughest jobs going in Australian retail, but on Monday he projected optimism about the company’s future under his leadership.
“I know that Myer holds a special place in Australian retailing, but I also understand that this position has shifted in recent times, and, is being challenged by an ever changing global retail environment,” King said.
“I am confident that we can turn this great company around. We can rebuild pride, confidence and relevance in Myer, especially with our customers.”
King’s biggest challenges may lie ahead though. He faces some decidedly more terse exchanges with retail landlords and Myer’s largest shareholder Premier Investments.
Premier chairman Solomon Lew is currently in talks with other shareholders to devise a plan that could overthrow Myer’s entire board.
He has been routinely critical of the department store since acquiring a 10.8 per cent stake in the business last year.
In recent weeks Lew has complained that Myer has engaged im a program of “extreme discounting” under executive chairman Garry Hounsell.
Myer has contested that, but King has joined the business during one of its most promotional times of the year – winter clearance sales.
Myer is under pressure in June to clear thousands of winter lines after a warm start to winter crimped March and April sales.
Hounsell warned several weeks ago that Myer’s fourth quarter profit could be impacted by the weather, which could leave King taking a profit downgrade to the market as a first impression with shareholders.
Compounding matters, analysts are concerned that if Myer’s sales declines worsen it could breach its banking covenants – further restricting King’s financial flexibility.
Last month Myer posted a 3.1 per cent decline in comparative sales for the third quarter ended 28 April.
In his arsenal King will have decades of retail experience and his former House of Fraser colleague Allan Winstanley, who was named chief merchandise officer last month.
It is expected that Myer will provide a more fully fledged strategic update in the coming months.
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