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Myer chairman slams 'failures' after $476m loss

Business

Myer’s executive chairman has issued a damning indictment of the department store chain’s performance under ex-chief executive Richard Umbers after it slumped to a $476.2 million first-half loss.

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Myer said today it had recorded $538 million of impairments, restructuring and store closure costs, which Garry Hounsell said came after a trading period blighted by poor decisions and rushed changes.

He said that, since assuming his role upon Umbers’ departure last month, the board had strongly backed Myer’s shift in focus back toward traditional strengths of product, price and customer service.

“Since becoming executive chairman, I have been driving the management team to trade the business more aggressively,” Hounsell said.

“To achieve this, I have renewed the entire team’s focus on product, price and customer service.”

Hounsell said changes had been rolled out too quickly and didn’t give enough attention to Myer’s traditional customer base, which adversely affected profitability.

“Results for the half-year were unsatisfactory and reflected a number of execution issues including, for example, the failure to respond appropriately to the heightened competitive environment prior to Christmas,” Hounsell said in a statement.

“In addition, the execution of strategic initiatives could have been better managed.”

Pre-impairment profit for the 26 weeks to January 27 fell 36.1 per cent to $40.1 million and sales fell 3.6 per cent.

Both were in line with the downgraded guidance issued last month.

Myer made a $515.3 million non-cash impairment relating to goodwill and its brand name, while copping another $9.2 million in impairments and a $13.7 million hit for a continuing overhaul of its stores.

Myer suspended its interim dividend but investors were undeterred, lifting its shares 1.75 cents, or 4.1 per cent, to 44.75 cents by 1049 AEDT.

Myer sinks into the red

NET loss of $476.2m vs. $62.8m profit

TOTAL sales down 3.6pct to $1.7b

NO interim dividend vs. 3.0 cents

– AAP

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