MYER is reporting a ‘significant deterioration in trading’, with no expectation retail trading conditions will improve anytime soon.
The company has reported a 3.6 per cent drop in sales during the first half of 2018, to $1.7 million.
Its most recent Stocktake Sale resulted in 6.5 per cent fewer sales than the previous corresponding period.
Myer expects profits for the first half of the year to amount to between $37 – $41 million.
The company reported a net profit of $64 million the same half last year, according to Fairfax Media.
“Myer does not anticipate an improvement in retail trading conditions during the second half and, given the recent sales volatility, Myer does not have a reasonable basis to provide a specific profit range for the full year at this time,” the organisation said in a statement.
Myer chief executive Richard Umbers said the ‘significant deterioration in trading’ reflected ongoing, challenging retail conditions.
He cited widespread industry discounting, a ‘subdued’ performance of Myer’s Stocktake Sale, and a continued shift in consumer behaviour characterised by reduced foot traffic and an increase in online shopping as factors.
“Myer recognises the ongoing, challenging and competitive retail conditions and remains resolutely focused on improving foot traffic and sales across all channels during the second half [of the year], including the need to remain competitive in key categories where we are facing the most competition,” Mr Umbers said.
The company’s online sales continue to grow, increasing by 48.9 per cent in the first half of 2018.
Web-based sales rose by 48.4 per cent in the first half of 2017.
Myer chair Gary Hounsell is reviewing all aspects of the business – a process he said was ongoing.
“I recognise that shareholders will be disappointed with today’s announcement,” he said.
“The focus on costs is ongoing and was evidenced by the announcement on January 18 in which we announced a number of redundancies and the exist of a further floor at the support office, which will deliver annualised cost savings of over $7 million,’ Mr Hounsell said.
“I will provide further updates when appropriate”.
Myer reaffirmed its commitment to its Bendigo store earlier this year, after chain retailer Mountain Designs closed its Mitchell Street store.
“We are focused on providing Bendigo customers with great experiences, products and brands - both in store and online,” a spokesperson said.
Myer commissioned new escalators at the Bendigo store prior to Christmas in response to customer feedback.
“These improvements have been received positively,” the spokesperson said.