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Myer’s bumper profit lift for FY16

MyerMyer has more than doubled its full-year profit to $60.5 million after growing sales revenue three per cent.

Total sales were up 2.94 per cent to $3.3 billion for the 12 months to July 30. Compable store sales in its flagship and premium stores in Victoria and New South Wales increased by 5.6 per cent.

Richard Umbers, Myer chief executive, said the profit was in line with guidance and the results showed that the company’s five-year turnaround plan had made good progress in its first 12 months.

“There is no doubt that as a result of our strategy, Myer is a measurably stronger business today than it was a year ago,” Umbers said.

“Our early progress shows Myer in a new light, where the focus on customers, brands, service, efficiency and productivity is evident in our results.”

Umbers said the first year of the ‘New Myer’ strategy demonstrates the complexity of the department store chain’s journey.

“The strong customer take up of our wanted brands has impacted margin and mix. Higher concession sales contribute to improved service and lower costs over time, but reduced gross profit margin,” he said.

Umbers said since August 2015, Myer has introduced over 850 new or upgraded brand destinations, and improved its customer service, particularly in its flagship and premium stores.

Myer also announced it will exit its Logan store in FY18 and will not proceed with its previously announced planned store in Darwin. As part of the ongoing consolidation of its store network, the company has previously announced other store exits as well, in Brookside, Orange and Wollongong in FY17. Myer will also hand back space at stores in Cairns, Blacktown and Castle Hill in FY17 to further drive productivity improvements.

“Our commitment to improving productivity has led to a reduction in operating costs, and we remain focused on re-shaping our store footprint, and investing in stores that align with our core customers,” Umbers said.

Umbers said Myer will be accelerating capital investment in priority stores in 2017.

“The newly opened Werribee store demonstrates how we are tailoring the Myer offer to our local customers,” he said.

Myer’s new store at Warringah, which is set to open in November, will be the first physical embodiment of the company’s customer-led ‘New Myer’ strategy, Umbers stated. Myer will also commence refurbishments and upgrades at a number of stores, including Melbourne, Sydney, Maroochydore, Eastland, Doncaster, Chatswood and Pacific Fair.

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