David Jones’ future looks grim. Is Myer next?
Summary
Myer faces declining profitability and relevance as department stores compete with online sellers and specialist retailers. Unlike David Jones, which has entered administration and plans to close half its stores, Myer has a $100 million net cash buffer and has reduced its store count, giving it time to try to turn around its business.Key Facts
- Myer’s sales rose to $4.1 billion in the last financial year, partly because it acquired five apparel chains from Premier Investments.
- Myer said higher-than-planned promotions helped stimulate demand but reduced profitability.
- Myer reduced the value of its brands by more than $200 million in one year.
- IBISWorld said department stores have lost relevance as online platforms and specialist retailers attract shoppers.
- Cost-of-living pressures have encouraged shoppers to seek deals, according to IBISWorld.
- Myer ended the last financial year with a $100 million net cash buffer.
- Myer had 56 stores, down from 60 before the pandemic.
- David Jones entered administration and plans to close half of its 38 stores.
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