By Aimee Chanthadavong
While increased occupancy costs, including rent, utilities, rates, taxes, as well as labour costs continue to largely impact the cost of doing business, Myer is geared up for the short and long term.
Speaking at the Myer annual general meeting, CEO and managing director Bernie Brookes said he’s looking forward to a busy and profitable Christmas.
“It certainly remains patchy, but we are well positioned for Christmas,” he said.
“We’ve got the best stock levels we have. We have clean, fresh stock ready for Christmas and if you walk the store of Myer Melbourne you’ll certainly see readiness for what should be a good Christmas and stocktake trade.”
Brookes also pointed to the company’s “strong competitive advantage” it has invested in as preparation for current and future challenges the business could potentially face.
He listed investing in growth initiatives such as new store, Myer Exclusive Brands, omni-channel and sass & bide; leveraging previous investments in POS and merchandise systems; improving productivity through staff training; and revitalising store environment with new visual merchandise concepts, as foundations for company’s future growth.
Adding to this, the company has launched a dedicated Christmas App, which uses augmented reality to help in-store Christmas characters ‘come alive’ on customers’ smartphone or tablet. Users can also create an online Christmas card and share them family and friends, find gifts, as well as book a time with Santa at selected stores.
Despite these initiatives and investments, Brookes said they are still “quite cautious” about 2014.
“We anticipate a year of two different halves. The first half being really difficult against some good numbers last year but equally important some heavy costs imposed on this half as a result of refurbishments of four stores.
“We will get the benefit when we complete the new stores annualised throughout the year, two major refurbishments, good category growth such as womenswear, menswear and cosmetics and the refurbishment of three of the top 20 stores.
“We expect to improve our gross profit largely due to sourcing but also due to our control of shrinkage and markdowns and our Myer Exclusive brand mix. Our cost of business will probably grow between 4-5 per cent including $11 million in one-off cost for the cost of refurbishing those three stores.
“Our forecast capital expenditure is just over $90 million, therefore you’ll naturally see an increase in depreciation and therefore we really expect 2015 to be a much improved year as our two new stores open and three refurbishments are complete and we annualise all the increases we’ve had in penalty rate towards the end of 2014 business year.”