This article is from the Australian Property Journal archive
MYER has booked a $172.4 million full year loss after the pandemic smashed in-store trading, and despite a surge in online sales the result prompted vocal major shareholder Solomon Lew to call for the board’s resignation.
The full year loss included significant items of $159 million, including impairments to brand names of $95.9 million, and lease right-of-use assets of $37.1 million. Net loss after tax without these was $11.3 million. Last year, Myer posted a net profit of $24.5 million.
Total sales were down 15.8% to $2.519 billion, and comparable store sales by 3.3%. All of its stores closed for most of April and May during the first round of nationwide lockdowns, and about 10,000 employees were stood down.
Several stores are currently closed due to current lockdown measures in Melbourne.
Group online sales jumped by 61.1% to $422.5 million. Sales grew 98.8% during the pandemic-affected second half compared to the prior corresponding period, led by the beauty and homewares categories.
Operating gross profit margin decreased by 85 basis points to 38.0%, undoing the 62 basis point improvement of the previous year. The drop was due to COVID-19 effects, including a higher mix of clearance sales and a mix that was skewed to lower margin products. Cost of doing business was down 13.8% to $863.8 million.
Lew, the head of ASX-listed retail company Premier Investments, has a 10.77% stake in Myer and has been a long-time vocal critic of the company’s direction.
“The numbers are dire – notwithstanding the impact of COVID-19, the business is trading beyond poorly – sales are down, EBITDA is down – on top of massive further write-downs to its brands and leases,” Lew said yesterday.
Premier called for the “immediate resignation of the Myer board and for an urgent management overhaul”.
Prior to the pandemic, Myer earlier this year flagged further space handbacks and store closures as its struggled in the difficult retail environment. Since July of 2018, it had closed or announced the closure of 29,000 sqm in store gross lettable area.
The company finished the period with a net cash position of $7.9 million, a $46.6 million improvement on the prior year, with inventory down 26%.. Myer received $93 million in JobKeeper payments but does not expect to qualify for the next round of the payment.. No dividend was declared.
In August, Myer entered into an agreement with Australia Post to provide warehousing and online fulfilment services to boost efficiencies. Myer also recently announced the introduction of Amazon Hub, a network of Amazon parcel pickup points that were introduced at Myer Hub counters in 21 stores this week.
Myer also recently extended its $340 million debt facility for two years.
