Department store Myer has revealed it will slash its store network further in 2013, following a significant drop in profit for the 2012 fiscal year.
The results, for the year ending July 28, saw Myer's full year sales down 1.3 per cent to $3.19 billion, with comparable store sales also down by 2.0 per cent.
The retailer's net profit after tax (NPAT) for the year also fell by 14.3 per cent to $139.3 million, excluding one-off items, with earnings before interest and tax (EBIT) down 11.2 per cent to $230.0 million.
Citing a “challenging retail environment with subdued consumer confidence” for the lacklustre finish, Myer CEO Bernie Brookes also revealed that Myer will not renew the lease on its Fremantle (Western Australia) store.
The store is expected to close in the first half of calendar 2013, with Myer set to also shut doors on its Elizabeth (South Australia) store. The lease on the Elizabeth store will also not be renewed once it expires on February 2014.
According to the company, the Fremantle and Elizabeth stores represent less than one per cent of total sales and team members from both stores will be redeployed to nearby stores.
However, overall, Brookes said he believed the business had delivered a solid result considering the current market.
“The highlight of this year’s result is the strong gross profit performance reflecting a number of key achievements. We delivered on the objectives of growing our Myer Exclusive Brands to 19 percent of sales, further reducing our shrinkage and markdowns, and improving our sourcing,” he said.
“The progress we made in implementing our five-point strategic plan also clearly supported the profitability of the business and helped to offset ongoing cost headwinds. We have also delivered on a number of initiatives to improve both our loyalty program and omnichannel offer to reflect changing customer needs in this environment of rapidly evolving technology.”
Brookes also revealed Myer's key categories of womenswear, Miss Shop (youth), menswear and cosmetics all performed ahead of last year in sales and gross profit.
Best performing brands included: Wayne by Wayne Cooper, Regatta, Basque, Blaq, Cue, T.M. Lewin, Tokito, Lipsy, Miss Shop, Jack Stone, Mecca, Cosmetica, Kit, Benefit, Politix, Ziggy, Review, Heritage, and Sass & Bide.
The best performing states were Western Australia and Queensland.
Going forward, Brookes said the company focus will be on further developing key initiatives as part of the Myer 'five point plan'.
This will include improvement in customer service, enhancing merchandise offer, strengthening the Myer loyalty program, omni-channel, and optimising the company store network.
Advances in mobile and online will also be a focus, with the Myer One mobile iPhone application set for launch before Christmas.
“Our online sales more than doubled and the rate of growth has accelerated during the year. We believe this represents a significant opportunity for the business,” Brookes said.
“We will continue to implement a significant pipeline of further enhancements for our website, building on the merchandise offer and site functionality. We recognise that our customers want to be able to touch and feel products in store as well as engage with knowledgeable and helpful staff.
“The right combination of physical stores and technology, together with the right offer and fast, efficient fulfillment is critical to our success in omni-channel.”