The company on Thursday said it will take a total $45.6 million hit after writing off the value of its 20 per cent stake in Topshop’s Australian franchisee and impairing the value of its struggling sass & bide brand.
Myer had previously expected net profit to exceed 2016’s $60.5 million but the writedowns and another $20 million of costs look like eating up the majority of the $66 million to $70 million underlying net profit it now forecasts.
Shares in the retailer were down 9.2 per cent, or 7.5 cents at 74 cents by 1020 AEST.
The shares have fallen almost 50 per cent since August last year, wiping more than $600 million off Myer’s market capitalisation.
Chief merchandise and customer officer Daniel Bracken, who is also deputy chief executive, is leaving the company after two and a half years in the role.
“We are responding to the challenging external environment in a way that preserves the integrity of the New Myer strategy that is built around customer service, engaging retail experiences and wanted brands,” chief executive Richard Umbers said in a statement.
Myer also confirmed it has been unable to secure a commercially acceptable deal with Topshop’s UK owner Arcadia Group to keep operating Topshop and Topman concessions within its department stores.
It wrote off its $6.8 million stake in Topshop franchisee Austradia and impaired the value of women’s clothing brand sass & bide by $38.8 million.
“Every effort is being made to improve the performance of the business,” Myer said of sass & bide.
We value local independent journalism. We hope you do too.
InDaily provides valuable, local independent journalism in South Australia. As a news organisation it offers an alternative to The Advertiser, a different voice and a closer look at what is happening in our city and state for free. Any contribution to help fund our work is appreciated. Please click below to become an InDaily supporter.