Inside Myer’s disastrous $476m loss
RETAIL giant Myer has slumped to a first-half loss of $476.2 million.
The department store has suspended its interim dividend after the embattled chain recorded $538 million of impairments, restructuring and store closure costs.
The stumbling retail giant made a $515.3 million non-cash impairment relating to goodwill and its brand name, while copping another $9.2 million in impairments and a $13.7 million hit for a continuing overhaul of its stores.
Pre-impairment profit for the 26 weeks to January 27 fell 36.1 per cent to $40.1 million, in line with last month's profit warning, while sales fell 3.6 per cent as expected.
Myer's executive chairman has issued a damning indictment of the department store chain's performance under ex-chief executive Richard Umbers in the wake of the financial woes.
The retailer had recorded $538 million of impairments, restructuring and store closure costs, which company chairman Garry Hounsell said came after a trading period blighted by poor decisions and rushed changes.
He said that, since assuming his role upon Umbers' departure last month, the board had strongly backed Myer's shift in focus back toward traditional strengths of product, price and customer service.
"Since becoming executive chairman, I have been driving the management team to trade the business more aggressively," Mr Hounsell said.
"To achieve this, I have renewed the entire team's focus on product, price and customer service."
Mr Hounsell said changes had been rolled out too quickly and didn't give enough attention to Myer's traditional customer base, which adversely affected profitability.
"Results for the half-year were unsatisfactory and reflected a number of execution issues including, for example, the failure to respond appropriately to the heightened competitive environment prior to Christmas," Mr Hounsell said in a statement.
"In addition, the execution of strategic initiatives could have been better managed."
Pre-impairment profit for the 26 weeks to January 27 fell 36.1 per cent to $40.1 million and sales fell 3.6 per cent.
Both were in line with the downgraded guidance issued last month.
Myer made a $515.3 million non-cash impairment relating to goodwill and its brand name, while copping another $9.2 million in impairments and a $13.7 million hit for a continuing overhaul of its stores.
MYER'S FINANCIAL WOES
* Net loss of $476.2m vs. $62.8m profit
* Total sales down 3.6pct to $1.7b
* No interim dividend vs. 3.0 cents