The books have just shut on the 2011 fiscal year and, as the results are tallied up this month, the Myer board will meet to decide the fate of Myer’s current chief executive Bernard (Bernie) Brookes.
After almost six years of service, Brookes’ time with the department store giant is up next year, but rumours are rife that he will continue in his role and, when contacted at the time of writing, Myer all but confirmed the extension of his contract.
“The Myer Board and CEO Bernie Brookes are well progressed in their discussions for an extension to Bernie Brookes’ contract, which expires on August 20, 2012, and are confident of a positive outcome extending Mr. Brookes’ term as CEO. An announcement will be made at the appropriate time once those discussions are complete,” Myer general manager, corporate affairs Jo Lynch says.
However, considering Brookes’ history with the company, there are many who might label such an announcement borderline redundant.
Recent profit figures and challenging trading conditions aside, Brookes has transformed the company’s fortunes since taking the helm as chief executive in 2006, guiding the business from humble beginnings as part of the Coles-Myer Group to the retail behemoth it is now, operating as a stand-alone entity to be reckoned with, and valued at $3.28 billion according to sales last year.
With 34 years of retail and management experience under his belt, Brookes' path to the top is marked with various achievements, but it is arguably his work with the Woolworths supermarket business which attracted the Texas Pacific Group (TPG) while in the process of acquiring the Myer department store chain from the Coles-Myer Group.
Previously management director of Woolworths, Brookes’ work as a chief architect, heavily involved in the Woolworths’ “Project Refresh”, reduced the company’s costs by more than $5 billion over five years, and moved the business from a state-based structure to a national structure, including the implementation of a new supply chain and IT system.
TPG spotted a star in the making and wasted no time offering Brookes the top job at Myer – and by June 2, 2006 Brookes had been appointed managing director and CEO of the Myer Group, replacing incumbent Dawn Robertson.
The move saw Brookes, then 46-years-old, responsible for 61 Myer outlets, and reporting directly to then Myer executive chairman Bill Wavish who, interestingly, also counted Woolworths as a previous employer, having spent some time with the company as chief financial director and director of supermarkets before resigning in April 2003.
At the time, TPG called the shots with an 87 per cent share in the Myer group, followed by co-owners the Myer family and the Myer Management Board, and Brookes’ was given the all-important mission of improving Myer’s profitability.
To do this, Brookes was provided with full support to turn the business around and revamp its operations from signage to store structure, layout, marketing, and product, and in the years that followed he orchestrated a 360-makeover of the Myer business, transforming the company into a front-runner in Australia’s retail market.
In 2006, Myer’s profit margin hovered at around 4.27 per cent, a few notches under the 6.5 per cent raked in by rival department store David Jones, but Brookes moved quickly to close the gap and in July 2006 kicked off a “History Making Clearance” sale to get rid of excess stock and reduce inventory.
The tactic saw Myer inventory slashed from $1.5 billion to $750 million in two months, and also saw the closure of several store-specific warehouses, but by July 2007 the company had reaped the rewards, with an 84 per cent increase in earnings before interest and tax (EBIT) for the half-year. Total sales for its full-year results were up 3.6 per cent to $3.289 billion, with EBIT for FY07 also up 147 per cent to $180 million, compared to the previous corresponding period.
Wavish, for the most part, credited the result to Myer’s cost-cutting initiatives, reduced inventories, and a more frugal attitude overall and said the changes were necessary in order to build a solid platform for Myer’s future growth. “The changes have been about getting the business metrics right, and building a strong foundation for the future. The next 12 months will see the completion of that base.”
Brookes echoed this sentiment.
“The team we have progressively assembled at Myer has done a good job to date. But all we have done is get back into the game from a low base. I have great confidence in our continuing ability to raise our game and to achieve our vision.”
Myer also announced at this time, its intention to invest in further growth with plans to increase its retail network from 61 stores to 80 stores and, as he hinted during an interview with ABC in November 2006, Brookes turned his attention to improving the Myer product offering. “I think, from our perspective, we’ve probably got a few too many brands in the categories and so therefore we have gone about reducing some of those brands. If you think about a department store in its heyday, it was about providing a wide range of good quality products,” he said. “[However] you’ve got to be careful not to reduce the range too much because in many cases you’re going to disenfranchise the customers. So we don’t plan to exit any categories, and if anything, we plan to look at some new categories.”
Fast forward a few years and Brookes has spearheaded a few more milestones in the Myer timeline, including the shock acquisition of iconic Australian designer label Sass & Bide from David Jones, in February this year.
Throughout 2011, and under Brookes’ management, Myer has continued to lure lucrative labels from David Jones, including one of its most recent triumphs, popular womenswear brand Metalicus [April 2011].
As reported on Ragtrader.com.au, Myer has expanded its product offering in recent years with the addition of various labels such as Satch, Karen Millen, Catherine Malandrino, Jayson Brunsdon Black label, Lee Anglomania by Vivienne Westwood, Wayne Cooper and Arthur Galan, to name a few.
On the marketing side of things, Brookes has also reinvented the Myer offering, taking major steps to endear the public to the brand and captivate consumers with initiatives such as the “Myer is My Store” campaign. The signing of Australian darling and 2004 Miss Universe Jennifer Hawkins as the face of Myer in 2009 was also a massive coup for the business, and since then Myer has also had its catwalks and campaigns fronted by the likes of Nicole Trunfio, Jessica Hart, Lauren Phillips, Laura Dundovic, Kris Smith, and Rebecca Judd – all store ambassadors.
Internally, Brookes has also invested in staff training and development during his time at Myer, despite the loss of jobs caused by the warehouse closures following his appointment in 2006. When asked about these job cuts by the ABC, he said it was a necessary measure to streamline the business at the time.
“Our primary objective was to streamline and do away with as many things as we possibly could, so we took our management paperwork down by 60 per cent. We did reduce the numbers of staff in the store support office. We took about 15 per cent of our staff out, which means that we are on about 150 people less. Reducing the numbers of people was an important part of lowering the cost base in the business.”
Since then, Brookes has introduced a variety of staff training programs, including the Graduate Program, Management Development Program and Awesome Service training, and earlier this year [May, 2011] Brookes also revealed that a $25 million store-by-store staff training program by Myer was about 25 per cent complete.
As for what the future holds, Myer remains tight-lipped, barring the brief statement issued (as above) – but perhaps Brookes’ track record speaks for itself.
