2005: Myer's Crunch Year

In today's saturated fashion retail sector, Australian department stores are under increasing pressure to compete for and earn their slice of the retail pie.
Growing competition from state-of the-art shopping malls and the resurgence of strip shopping in the country's major cities have meant the department store model is no longer the undisputed king of retail.
Yet regardless of these challenges, department stores continue to play a leading role in fashion retail, according to Myer managing director Dawn Robertson.
"You only need to look at the huge amounts of media coverage generated when we launch our seasons with parades, or drive a strong fashion message at Spring Racing. We offer our customers the best selection of international, national and iconic brands, and customers know that if they come to Myer for fashion, they have access to the nation's best range of women's and men's [apparel]," she says.
These are impressive claims, but despite Myer's detractors, no one could accuse the department store of resting on its laurels.
Robertson is quick to acknowledge that the average fashion consumer is now more demanding than ever. Department stores - as conduits for the latest in international trends - are uniquely placed to respond to that consumer's requirements, she says.
"Fashion retailing has changed dramatically in recent years. Our customer is more discerning and knows exactly what she wants. She reads fashion magazines and The first six months of calendar 2005 (second half of FY04), were tough on fashion retailers, and Myer was no exception. Like many apparel retailers, the store was impacted by the late onset of cold winter weather, which ate into sales of winter merchandise, resulting in weak year-end profits.
However Myer dealt with outstanding merchandise issues at the end of the winter season and started summer 2005 with a clean inventory, going on to deliver a solid sales increase of 2.4 per cent in the first quarter of the 2006 financial year.
Sales figures aside, 2005 was also a crunch year for the department store in a number of respects.
The announcement in September of an ownership review promised an end to months of speculation over who would steer Myer into the future. Parent company Coles Myer is currently looking at a number of ownership options including retention, sale or de-merger and an outcome should be known in the first quarter of calendar year 2006, Robertson claims.
The year 2005 also saw Myer answering the challenge to target the youth market with the opening of The Basement at Myer Melbourne - an emporium devoted to youth and street fashion and offering more than 50 new youth brands.
The store also launched Joh Bailey hair salons in 24 stores across Australia in October as well as reopening a refurbished Myer Brisbane in August and a revamped cosmetic hall at Myer Melbourne.
Often seen as a middle market stalwart, Myer has utilised advertising and marketing to make itself "more accessible and fun than some other retailers", Robertson claims.
Recent advertising campaigns - including the Dame Edna Everage Christmas gift giving and the Desperate Housewives Spring Racing season campaigns - epitomised this strategy.
However, while catchy ads have done much to maintain Myer's strong brand presence in the minds of consumers, a common perception persists that the store has under-invested in staff and customer service. Myer's focus on rebuilding a culture of customer service in recent years has done much to counter this perception and will pay dividends before long, Robertson claims.
Over the past two years, more than 4000 team members participated in an advanced selling skills program and 1400 womenswear team members participated in selling programs. Store managers also participated in a merchandise skills program.
"We now believe we are well placed to become 'famous-for' customer service, which will be a strategic objective in the coming years," she says.
In a global retail environment where consumers have ready access to the latest overseas fashion and retail trends either through cheap travel or the print and online media, Australian department stores clearly need to have all elements of their fashion offer running smoothly - from supply chain to customer service - in order to thrive.
As a geographically remote market operating in a global retail scene, Australia presents specific challenges in terms of department store retailing, Robertson concedes, but in her view, Myer is up to competing with the best of the world's retailers.
"Department stores around the world have reinvented themselves, and Myer has a strategy to drive improvements across the business, add great merchandise, improved service in fun and visually exciting stores," she says.
"We aim to be first to market, and launch key products at the same time as they are launched in overseas markets."
If Robertson's commitment in this respect is anything to go by, Myer's achievements during 2005 should be regarded as merely the prequel of greater things to come.
"During the year 2006 Myer will continue to innovate and add even more great brands in womenswear, menswear, footwear, accessories, and intimate apparel, to support our already strong offer of international, national, icon and private brands."