ebt, launched an online business, refurbished 70 percent of the stores and differentiated the merchandise offer and implemented a vision, values and culture program. It was inevitable that Myer would need to look overseas for a CEO to replace Richard Umbers and in King they have recruited an executive who actually brings department store retail experience, after more than a decade under leadership from other retail channels. King will need every ounce of his 30-plus years of experience across department stores, specialty retailing, premium global brands, wholesale apparel and discount retail if he is to revive the fortunes of the venerable but ailing Myer. Indeed, the Myer job presents as a tougher assignment than House of Fraser, which was acquired by the Chinese conglomerate Sanpower in 2014, allowing King to undertake consultancy projects and assist a number of startup businesses in the United States. King is taking over a business that has been in a downward spiral for many years, albeit encouraged for a brief period under private equity ownership and in the early period of its float on the Australian Stock Exchange. Sales and earnings are continuing to tumble, investor confidence is at a bargain basement low, management ranks are thin, customers are confused about what Myer stands for and what its merchandise proposition is and the retailer is sailing perilously close to breaching its banking covenants. If that is not enough, King will have to contend with shareholder and market unrest stirred by Myer’s largest shareholder, Solomon Lew, who has laid siege to the retailer’s board of directors over the poor trading performance and a turnaround strategy that has provided little indication of success.  Lew is also critical of the lack of retail experience on the board and has argued in the past week that King can expect little guidance from directors on the market conditions and Myer’s immediate and long-term challenges and opportunities. Lew rocketed off another missile to Myer shareholders after the retailer issued its third quarter sales last week, results that recorded a further decline in revenues and a seemingly inevitable further fall in profits. Demonstrating how bad Myer is actually going is the fact most analysts noted that the poor trading results were, at least, not as bad as had been anticipated. Despite a ‘sell recommendation’ on the stock from a number of leading analysts, including Citi and UBS, investors obviously also cheered the fact that the third quarter results could well have been worse by lifting the share price to the princely sum of 45 cents. Myer’s total sales for the third quarter to April 28 were $635.3 million, down 2.7 percent on the same period in 2017 but alarmingly down 3.1 per cent on a comparable store basis. Total year to date sales of $2,355.0 million are running 3.4 percent down on the 2017 financial year and down 3.0 per cent on a comparable store basis. The only promising result for Myer in the third quarter was a 49.4 percent lift in online sales to $35.9 million. Online sales year to date are $141.1 million, up 49 per cent. Myer executive chairman Garry Hounsell claimed a renewed focus on product, price and customer service announced in February had delivered encouraging results during March, but his enthusiasm quite possibly overlooked the timing of Easter. Hounsell blamed the unseasonably warm start to winter for lower than expected sales of apparel, shoes and accessories. Examining the Myer third quarter results, Lew and some analysts are now forecasting a further downgrade on profit projections for the full 2018 financial year. Hounsell himself warned that there may be an impact on profit in the fourth quarter as a result of the apparel, footwear and accessories trading results. In his letter to shareholders after the release of the latest results, Lew said they should be prepared for a fourth profit downgrade for FY2018 and a massive loss in September as the retailer moves to reconcile trading results with its balance sheet and likely further writedowns. Lew said further profit downgrades are inevitable as a result of discounting and the flawed turnaround strategy pursued by Richard Umbers, who vacated the CEO chair on February 14. Perhaps a little bruised from the ‘death by a thousand cuts’ and the ammunition provided to Lew in his criticism of Myer leadership and performance, Hounsell has indicated the retailer will not continue to provide quarterly sales updates in FY2019. In a bid to blunt Lew’s attacks and to retain investor confidence ahead of the release of the third quarter results, Hounsell told shareholders in a letter on April 27 that King understood the Myer product mix and the complexity of retailer’s operations. Hounsell assured shareholders that King understands fashion retailing, particularly department stores, and brings a new perspective to Myer and has been issued “a full mandate by the board to deliver an improvement in the financial performance”. King certainly faces some pressing issues as he settles into the CEO’s chair in Myer’s Melbourne headquarters. The most pressing issue is quite possibly a review of senior management ranks, which appear to lack depth and crucial experience. It would not surprise if, as was the case with the Coles supermarkets turnaround when it was acquired by Wesfarmers in 2007, King picks up the phone and calls in some of his former retail colleagues in the United Kingdom. The second priority is to genuinely do something about customer service levels in stores. Who could possibly quantify the lost sales (and theft) in stores resulting from the wide open spaces, without a single salesperson to torment, unless of course you count staff from the concession store within store outlets who, surprise, surprise, aided by counter staff continue to outperform Myer’s own departments. Mind you, there is also a need for King to pacify those concession operators who are becoming increasingly concerned about the uncertainty of Myer’s direction, falling foot traffic and store closures. Suppliers could also do with a bit of a hug at this time and they are crucial to decisions that King must make on the merchandise and marketing strategies vital to any turnaround in sales. Operationally, King will need to review store performance and determine the optimal store network as well as the continued development of the online sales platform and Myer One loyalty program that has just been relaunched and customer services. King has already visited a number of Myer stores and provided a pep talk to staff whose morale has suffered, particularly in the past 12 months. Those staff, like investors, suppliers and customers, have seen a lot of turnaround plans over the years and they will be hoping King can do what his predecessors have been unable to do, to rebuild Myer as a sustainable, contemporary, relevant and dynamic department store.