Myer is set to acquire the remaining 35 per cent it does not already own in Sass & Bide, taking its ownership to 100 per cent.
The sale price is expected to be around $30 million and will be funded through existing facilities and cash flow.
Sass & Bide achieved double digit sales and profit growth in FY2013.
The acquisition was announced at the same time as Myer’s full year results, which were less than rosy, with profit down 8.7 per cent to $127 million.
Full year total sales were relatively flat, seeing just 0.8 per cent growth to $3.1 billion.
Despite this, the bright spot was Myer exclusive brands, which grew sales to $40 million. Myer exclusive brands now make up 20 per cent of the department store’s sale, which concession comprise 15.4 per cent of the business and grew by $18 million.
Myer CEO, Bernie Brookes, was upbeat about the the results despite the significant fall in profit, blaming cost pressures associated with labour and occupancy costs, investment in growth initiatives, refurbishments and escalating depreciation charges.
“A strong focus on driving both gross margins and sales with continued targeted promotional activity delivered a pleasing operating result in the face of significant cost pressures.
“We are pleased to have achieved positive sales growth of 0.8 per cent for the full year despite sales momentum slowing in the second half, particularly in May and June,” he said.
The full ownership of Sass & Bide could provide the boost Myer needs.
“Since Myer acquired a 65 per cent stake in the business in February 2011, Sass & Bide has delivered a consistently strong performance, growing sales by 45 per cent and profit by 112 per cent over the period,” said Brookes.
“Sass & Bide is well placed to continue building on this strong platform and has an exciting pipeline of growth initiatives to deliver including new store openings and brand extensions into new categories.
“We enjoy a very positive relationship with Sass & Bide founders, Heidi Middleton and Sarah-Jane Clarke, as well as David Briskin, and are pleased that they will remain involved in the business. Sass & Bide will retain its autonomy of management and most importantly, of design.
“We thank outgoing director Daniel Besen for his contribution and look forward to continuing to work with the entire Sass & Bide team,” he said.
The Sass & Bide management team has been strengthened by the recent appointment of Megan Foster to the role of MD Sass & Bide and group GM Myer freestanding stores.
David Briskin, as executive chairman, will continue to manage the business in conjunction with Foster. Having joined Myer in 2006, Foster was most recently group GM marketing and brand.
