Myer Group executive chair Olivia Wirth has reported volatile trading conditions impacting sales across the department store and its owned Apparel Brands.
This includes heightened promotional activity across the retail sector as well as the internal resetting of Myer Group’s leadership team and the transition of its national distribution centre.
Myer also reported margin pressure from increased cost of doing business – in particular, store wages and occupancy outgoing costs impacted by inflation – and unfavourable foreign exchange movements.
Despite these challenges, Wirth confirmed that Myer’s department store sales were up 1.9 per cent in the first 16 weeks of the second half, hitting $837.2 million.
Comparable sales were also up by 1.5 per cent, with online sales up 9 per cent and representing 21.4 per cent of the department store’s total sales. .
However, the group’s Apparel Brands – which include Sass & Bide, Marcs and David Lawrence – were down 3.9 per cent to $211.2 million, with comp sales down 3.7 per cent.
Online sales were also down by 3.5 per cent, and represented 16.8 per cent of the Apparel Brands’ total sales.
“Despite challenging trading conditions that were compounded by a subdued retail environment in the lead-up to the May federal election, Myer has reported growth in its year-to-date sales,” Wirth said. “This was driven by our strong MYER one loyalty program, which has a record 4.6 million active members and a 79 per cent tag rate, as well as our strong online performance and our diverse mix of categories.
“Consumers remain cautious and focused on value in response to cost-of-living pressures and the current macroeconomic headwinds and uncertainty. This has resulted in volatile trading conditions with widespread promotional activity across the retail sector.”
Another challenge to Myer’s year-to-date performance was a sales mix shift to concession, as well as increased costs relating to ramp-up complexities and remediation at its new National Distribution Centre (NDC) in Ravenhall, Victoria. This has delayed the realisation of expected benefits.
While Myer irons out the automation and integration ramp-up issues at its new NDC, the group signed on a new 3PL to handle logistics from June 2025. This will have a capacity to process up to 40 per cent of peak online volumes, with Myer adding this approach significantly reduces reliance on store network for online fulfilment.
The group will also improvd NDC output, with the NDC now handling 10-15 per cent of online fulfilment, further reducing strain on stores.
“While recognising FY25 is a year of transition for Myer Group, we have taken steps to strengthen our leadership team and are making good progress in implementing our strategy,” Wirth said. “We are embedding Apparel Brands into the Myer Group, strengthening our balance sheet by successfully refinancing, commenced a restructure of Sass & Bide, Marcs and David Lawrence and have implemented an interim solution for the next peak trading period to address the challenges we faced at our new National Distribution Centre in 1H25.
“We are looking forward to our new executive leadership team presenting our Myer Group Growth Strategy to the market next week.”