This article is from the Australian Property Journal archive
MYER has pulled the plug on opening a store at QIC Property Fund's Watergardens shopping centre in Melbourne's western suburbs, after reporting a 19.8% fall in net profits to $87.3 million for first half year to December 31 2012.
The department store giant has already closed two stores during the first half year period, by not renewing the leases at Forest Hill in Victoria and most recently Tuggeranong in Canberra.
Yesterday CEO Bernie Brookes said in the current economic conditions, Myer has decided not to go ahead with a planned new store at Watergardens, which is owned by QIC Property Fund.
He also blamed planning delays at Watergardens. Myer initially committed to opening a store at the centre in 2008.
“In the current environment it is not unexpected that our discussions with landlords highlight adjustments in the timing of new stores and redevelopments. We have recently taken the decision not to proceed with a planned new store at Watergardens as significant delays in this development led to Myer exercising its right to exit the agreement.
“We will continue to provide updates on new store openings when we have certainty from developers. We will continue to review the merits of all new and existing stores particularly in the context of lease renewal discussions,” he continued.
Brookes added that Myer has successfully negotiated rent reductions in a select number of stores, although he did not reveal the locations as the negotiations were confidential with the landlords.
The Myer store would have been the first to open in Brimbank and lift the profile of the centre which is currently anchored by discount department store retailers Big W and Target, Bunnings Warehouse and Harvey Norman.
QIC Property Fund has completed a $150 million redevelopment at Watergardens, increasing the space to approximately 63,700 sqm of gross lettable area.
Meanwhile Myer recorded lower sales in the first half, falling 1.7% to $1.704 billion, down 3.0% on a comparable store sales basis. In the second quarter of last year, sales were down 0.4% to $1.023 billion and are 1.7% weaker on a comparable store sales basis.
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