ary demand and a business still reliant on promotional activity. The impairment changes the picture Myer’s headline loss was largely the result of a $279.6 million accounting write down on the value of its goodwill, brands and stores. Without that charge and other significant items, the retailer made an underlying net profit after tax of $42.5 million. However, the result still points to weaker trading with underlying profit down 2.9 per cent as reported and 32.1 per cent when compared with a full 12 months of Apparel Brands in both years. Total sales reached $4.09 billion, up 11.3 per cent on an actual basis following the addition of Apparel Brands. Yet the softer underlying profit shows this is not simply an accounting story. Myer has increased its scale, but it has yet to prove that the enlarged group can produce stronger margins and earnings. Executive chair Olivia Wirth said the second half was shaped by a “volatile and significantly more challenging macroeconomic and retail environment”. A “material downturn in consumer sentiment” became particularly evident in June and July, she said, compounding already subdued sentiment and weak discretionary spending. “While the financial outcome for fiscal 2026 is below our expectations, we remain focused on the areas within our control as we continue to execute our strategy,” Wirth told an investor briefing. Apparel tests the logic The acquisition of Apparel Brands brought Just Jeans, Jay Jays, Jacqui E, Dotti and Portmans into the group. The deal is central to Myer’s attempt to combine a traditional department store with a portfolio of specialty fashion chains, but its first full year reveals an uneven picture. Sales across Apparel Brands fell 1.3 per cent on a pro forma basis, despite a 6 per cent increase at Just Jeans, which emerged as the strongest performer in the portfolio. A more stable second half at Dotti offered another positive sign, but softness across the remaining brands, particularly Portmans, outweighed those gains.  Myer’s push into younger demographics is supported by its loyalty base, with Wirth noting that half of Myer One members are under 35. The retailer is seeking to convert that reach into sales through a womenswear reset aimed at younger, fashion-focused customers who increasingly discover brands through social media. As part of the strategy, Myer signed Acler, Effie Kats and Significant Other as department store exclusives after the three labels left their exclusive arrangements with David Jones. “We continue to believe it’s the right strategy to create long-term shareholder value,” Wirth said. The strategy now rests on whether Myer can convert greater loyalty engagement, a broader brand mix and integration benefits into sustainable profit. Christmas becomes the test Early FY27 trading has remained uneven, with softer conditions in August followed by improving momentum in September. Wirth nevertheless expects trading conditions and consumer behaviour to remain volatile over the next 12 months. That places greater weight on Christmas, with Myer looking to its traditional strength in gifting to offset uneven discretionary spending. The retailer has prioritised getting festive stock into its 56 stores ahead of its Christmas campaign launch despite global shipping delays. Black Friday will provide the first major test, with Myer expecting the promotional event to begin earlier again this year and create a longer runway for Christmas shopping. “We do perform well during gifting seasons,” Wirth said. “We are synonymous with gifting.” Solomon Lew’s appointment as a non-executive director formalises his influence over Myer at a critical point in its transformation. The retailer had indicated that Lew would be invited to join the board after acquiring Apparel Brands from his company, Premier Investments. This transaction made the Lew Group Myer’s largest shareholder. Wirth said his “deep retail expertise and strong economic alignment” would be important to long-term value creation, adding that Lew “knows the retail sector inside and out”. His appointment strengthens the link between the board and its largest shareholder as Myer integrates the Apparel Brands portfolio and works to improve its commercial performance. “There is significant change underway and many opportunities ahead,” Lew said. “I look forward to working with the board and management to help guide the group’s future direction.”  Myer’s challenge is no longer to explain the transformation. It is to show that loyalty growth, new brands, technology investment and integration savings can produce durable earnings before consumers recover. Christmas will offer the first serious verdict.