ted the retailer’s recovery will be gradual rather than immediate.  “They’re all levers, and I’d call it steady repair, rather than an instant bounce – I think this is going to take time,” Walker told Inside Retail. Three levers Wirth pulling 1. Direct sourcing The first cost lever that Myer Group plans to pull as part of its ‘value creation program’ is transitioning to a direct sourcing model.  This involves moving away from the current complex sourcing network managed through its Myer Sourcing Asia Limited (MSAL) office in Hong Kong and adopting a simplified, direct relationship with manufacturers.  Wirth expects this decision will reduce procurement and supply chain costs, increase supply chain agility while unlocking benefits from scale and collaboration. Moreover, she hopes to mirror the model of other successful retailers. The scale benefits will also come from closer cooperation with Apparel Brands, allowing for greater leverage in global sourcing negotiations. Apparel Brands includes the Just Jeans, Portmans, Dotti, Jacqui E and Jay Jays fashion chains, which Myer acquired from Solomon Lew’s Premier Investments earlier this year.  “There’s an opportunity to change the way that Myer, as in the Myer exclusive brands, design, produce and develop products to make sure that they’re increasingly efficient, to have greater flexibility in time,” Wirth said. Walker described Wirth’s plan to shift Myer Group to a direct sourcing model as “cutting out the middleman”. “So that means lower buying commissions, sharper vendor terms, faster lead times,” he explained. 2. Simplified distribution  The second cost lever in Myer Group’s ‘value creation program’ focuses on simplifying its distribution network.  Myer is actively restructuring its logistics by removing unnecessary distribution hubs, optimising inventory flow and streamlining the supply chain.  This effort to simplify the distribution model is designed to drive down fulfilment costs and boost operational responsiveness, ensuring stock flows more efficiently to stores and customers.  The ongoing integration with Apparel Brands should also help Myer Group capitalise on its expanded scale to further improve margins in a challenging retail environment. “Fewer points of presence, fewer hubs, less double handling, fewer delays… what they want to do is get the product quicker to the customer, cheaper per unit,” Walker explained.  3. Operational efficiency  Finally, Myer Group aims to drive operational efficiencies across its retail business.  This involves a comprehensive review and optimisation of core store operations, including scheduling and enhancing staff flexibility in stores – a significant initiative that is already underway. Wirth reiterated that operational improvements are integral to “having greater flexibility” to mitigate inflationary pressures and maintain competitiveness. Walker warned that the cost of doing business at Myer Group, including wages and rents, needs to grow at a much slower rate than the benefits generated from the company’s ‘value creation program. “Ultimately, what we’re talking about is cutting costs to improve margin, but you can’t cut costs to profit,” Walker said. To ensure genuine improvements in profitability, Myer Group’s cost reductions must be balanced with strategies that sustain and grow revenue. “The challenge, I think, amongst all this is, whilst it’s easy to say, it’s hard to do, and two… revenue needs to keep coming in at a greater level than it currently is,” he concluded.