This article is from the Australian Property Journal archive
The founding name in Australia’s retail shopping history, the Myer family yesterday bought back the store… for $1.4 billion…. with a little help from friends.
In total, the deal includes the 61 Myer department store business across Australia.
Four landmark properties, including the first Myer store in Victoria’s Bendigo and the landmark department store in Melbourne’s Bourke Street Mall, are the key to the $1.4 billion deal between a syndicate involving Myer family and its partner Texas Pacific Group and Newbridge Capital and vendor Coles Myer Limited.
The four blue property assets within the Myer treasure trove are the Myer store spreading over two blocks of Melbourne CBD, the family’s first store in the heart of Bendigo, the Wagga store, a store in Dubbo and half of share in the property holding in the Cairns department store.
The four stores are valued at in excess of $500 million.
The Bendigo store was opened by founder Sidney Myer in 1900; he then opened Melbourne’s famed Myer Emporium in 1911.
Media speculation the David Jones would swallow up the Myer brand proved totally wrong.
The consortium is led by TPG and Newbridge Capital, TPG’s Asian Pacific investment arm. TPG has a longstanding track record of building well-known consumer brands and retail department stores, including Debenhams department stores (UK), Neiman Marcus and Bergdorf Goodman (US), Bally (Switzerland), J.Crew (US), and Petco (US).
Managing partner of Newbridge Capital, Dan Carroll said the consortium welcome the opportunity to bring our skills and experience to Myer in Australia.
“Our involvement with upmarket department stores, such as Neiman Marcus in the US and Debenhams in the UK, has been very successful, and we look forward to drawing on that experience and using those skills at Myer,” Carroll said.
The Myer Family Company is a 5% shareholder in the consortium.
Newbridge hailed the deal as “the return to private ownership is an exciting new chapter for Myer”.
Newbridge Capital head of Australia and New Zealand, Ben Gray added we foresee that Myer customers will experience a continuation and acceleration in the enhancement of the product offering that has been achieved by the Myer team in recent times.
“We look forward to a continuing partnership with the existing Myer team and the supply partners in building a world class department store business.”
Bill Wavish will join as executive chairman.
Wavish is the former finance director and director of Supermarkets of Woolworths. Wavish will stand down from the board of Housewares International and Atlas Metals.
“We have a number of ideas, based on experience elsewhere, as to how to further the improvements already made by the Myer team, but first it is sensible to seek input, ideas and views from management and all stakeholders,” he said.
The chairman of the Myer Family Company, Rupert Myer said the investment represents an opportunity to retain a financial interest in the Myer Department Store business.
“The family has had a one hundred year association with Myer and we are delighted to be partnering with such an experienced and successful group in Newbridge”.
Myer managing director Dawn Robertson said the decision represented a strong vote of confidence in Myer and the Myer team and provided certainty for the business.
“It is a credit to the entire Myer team that we have been able to continue to build the business as we have moved through the ownership process,” Robertson said.
“I am proud of the Myer team and our accomplishments, including our contribution to this transaction.”
CML’s decision to sell Myer was the culmination of a rigorous and disciplined seven-month process to determine whether divestment or retention of the business would create greater value for shareholders, CML chairman Rick Allert said yesterday.
“We have considered this issue in tandem with our development of Coles Myer’s next five-year strategy, taking into consideration the strategic fit of Myer in a largely volume and value business; the current complexity of the Coles Myer Group, and the most effective allocation of capital across the Group,” Allert said.
“We have considered the strategic fit of Myer with our other businesses and particularly the fact that Coles Myer is the only retailer in the world which has tried to combine full-line department stores and supermarkets.”
Allert added that the CML decision to divest has been driven by the Board’s belief that both our core food and liquor business and Myer will perform better separated, and that the price Newbridge has been willing to pay for the business recognises that Myer can further improve its performance with singular management focus.
“The Board’s decision provides significant opportunities to fund expansion of and sharpen management focus on our core food and liquor franchises in line with our new strategic direction, as well as to consider a further return of capital to our shareholders.
“From a strategic perspective, the Board believes its decision to divest is the best outcome for shareholders,” Allert concluded.
Coles will now seek a new name.
Coles Myer shares closed up 52 cents at $10.49 – up 5.2%.
By Nelson Yap
History of Myer
Sidney Myer arrived in Melbourne in 1899 as a penniless Russian immigrant and ended up creating one of the largest retail businesses in Australia. He and his brother worked briefly at a drapery store in Flinders Lane before moving to Bendigo where they opened the first Myer store in 1900.
They continued to prosper and opened another Myer store in 1908. In 1911 Sidney bought a drapery store in Bourke St, Melbourne. After buying up a number of the adjoining properties he built a department store on the site called Myer Emporium.
After establishing himself in Melbourne, Sidney expanded the business setting up in Adelaide and later across Australia. In 1920 he married Merlyn Baillieu, the 22 year old daughter of an established Queenscliff family. Not only did Sidney Myer achieve great business success, he also became a leading philanthropist.
