By Aimee Chanthadavong
Like rival David Jones, Myer continues to feel the pressure from the conservative consumer sentiment.
Myer reported total sales for the third quarter to 30 April 2011 of $657 million, down 2 per cent compared to last year.
On a like-for-like basis, sales were down 3.1 per cent compared to last year. Sales for the quarter were negatively impacted by approximately $6 million as a result of the Queensland and Victorian floods and Cyclone Yasi.
Myer CEO Bernie Brookes told RetailBiz that womenswear, meanswear, cosmetics and youth were the strongest performing categories while its electric business continues to be impacted by ongoing price deflation.
“Firstly, we are selling a lot more television but at the till it’s 30 per cent less the price than we use to sell. Our electrical business is not broken as much as the market and I have to give credit to JB Hi-Fi who has tried to compensate for that with selling more TV at a lower rate while we depend on fashion and cosmetic,” he said.
“We are exiting out of categories and that’s why sales have been poor and we will continue to exit from non-performing like consoles and games and GPS and we will concentrate on fashion.
“Our electrical business us to make up 15 per cent of the business and is now 12.5 per cent and we predict it will be 10 per cent next year. And we will concentrate on doing that 10 per cent really well. We have growth in small appliances and really good growth in toys and those are the things that we can stand on in a restricted range.”
The sales performance excluding the electrical business was an increase of 0.9 per cent compared to last year. Sales excluding electrical were down 0.3 per cent on a like-for-like basis.
Commenting on the company’s offshore website, myfind.com, Brookes said the success of the site has been growing.
“The myfind site has now gone from an original launch 150 lines up to over 500 to 600 SKUs and we will continue to develop that. But we are seeing across both the mystore and myfind websites $5 million in sales per year,” he said.
Brookes also highlighted that the company has seen an increase in foot traffic at its Sydney CBD store since the opening of Zara.
“The opening of Zara has helped increase our door count. We have seen a significant increase in the Sydney city store and Zara has attracted more people as the place was a bit of a bomb shelter so it’s now pleasing and it’s really a pleasure to have Zara open across from us, as it hasn’t decremented our sales and its brought through more foot traffic,” he said.
During the remainder of the financial year of 2011, Myer anticipate trading conditions will remain challenging and it continue to expect the net profit after tax for the financial year of 2011 to be up to five per cent below last year’s net profit after tax of $169 million.