Spring fashion and suitcases: What shoppers are buying at Myer

By Emma Koehn

Myer boss John King says shoppers are continuing to splash cash on spring and summer fashion, travel goods and kidswear despite evidence that spending is slowing at the department store.

The retailer’s sales hit $3.36 billion in the 52 weeks to July 29, up 12.5 per cent on the previous year and its best sales result since 2005, Myer said in a statement to the ASX on Thursday. Profit rose 18.2 per cent to $71.1 million, excluding some restructuring costs and expenses related to the closure of the Brisbane City store. Net profit including those charges came in at $60.4 million, up 23 per cent.

John King will exit the business after executing a five-year plan to turn Myer around.
John King will exit the business after executing a five-year plan to turn Myer around. Credit: Paul Jeffers

However, Myer has not been insulated from the tough economic conditions. The group confirmed comparable store sales had dropped by 1.9 per cent in the first six weeks of the 2024 financial year.

King said the business was cautious about the economic outlook, but noted that certain categories continued to sell well at Myer despite the slowdown, with the company’s spring and summer fashion selling better than at this time last year.

“The customer wants new stuff – they are not going to buy any of the old product.

“We are in that transition period, we’re not into high summer yet … but linen fabrics are doing exceptionally well for us across all brands,” he said.

Fragrance sales had also remained strong, particularly around Father’s Day, while the group’s kidswear lines were also in demand.

“Travel goods are [also] through the roof in terms of people buying suitcases and carry-ons.”

Myer CEO John King will depart the business next year.
Myer CEO John King will depart the business next year.

King told analysts on Thursday that the department store’s approach to selling goods in each category geared towards different budgets, referred to as the “good, better, best” strategy, was working in the current trading environment.

“We have customers who will trade up or trade down depending on their budget,” he said.

Despite this, it’s clear that trading conditions are becoming tougher for the 123-year-old department store, as consumer data shows households are cutting back on household goods and clothing spending to balance their budgets as they spend more on essentials.

The company said conditions deteriorated in the last quarter of the 2023 financial year, which resulted in total sales growth moderating to 0.4 per cent in the second half of 2023.

Myer also revealed on Thursday that its chief financial officer Nigel Chadwick will retire from his role in early 2024, with his deputy Matt Jackman to take the role from February of next year.

Myer declared a final dividend of 1 cent per share, fully franked to be paid on November 16, which is down on the 2.5 cents last year. It brings the full-year payout to 9 cents per share.

Myer shares were 2.9 per cent weaker just before midday to 61.2 cents.

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Source: Thanks smh.com