Myer’s boss John King says he expects “lumpy” sales – read falling – at the retailer for at least another 12 months as it weens itself off the drug of discounting to drive sales.
“We took a month worth of discounting out of half the year, so there was four weeks that we didn’t promote. And we’re doing the same as we speak now,” King told analysts on an earnings call this morning.
“So you’ll see the stores bump along at the low negative single digit for the course of 2019.”
Myer’s sales fell 2.8 per cent last half, Myer said on Wednesday. Credit Suisse analyst Grant Saligari crunched the numbers and reckoned sales in stores fell more like 5 per cent with the difference made up by online sales (which jumped 18.6 per cent to $151 million – or about 9 per cent of total sales).
In light of that King said Myer was cutting floorspace – closing floors but not stores, which landlords were supporting – and would move to a distribution centre model for online orders. Currently staff run around picking online orders off shelves in stores, which King said was not sustainable given how online was growing. The online surge over the Black Friday weekend last weekend caused chaos, he said.
Myer’s long-suffering investors appear happy, or at least relieved, with Wednesday’s result. Shares are up 12 per cent at 46c – the highest they have traded since November.
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