For clarity, let’s just soak up the below verbiage before we discuss.
“The company’s net profit slumped from $60.6 million in 2016 to $11.9 million – the weakest result since the retailer’s sharemarket float in 2009 – marred by writedowns of its investment in the local arm of Topshop, which went into administration in May, and its fashion brand sass & bide.
Sass & bide’s performance had been “below expectations”, with sales down $10.9 million from 2016, and Myer said it was writing down the carrying value of the brand by $38.8 million. At the same time, Myer’s $6.8 million stake in Topshop was obliterated.
Excluding the write downs and costs associated with its turnaround plan, profit was $67.9 million, down from $69.3 million and in the middle of the company’s guidance given in July of between $66 million and $70 million.
Now back to it…..
Myer were trying to diversify their portfolio with investment in both Top Shop and Sass and Bide, but both gambles have not paid off. And meanwhile their sales continue to plummet. As someone who has been privileged enough to work for both David Jones and Myer in the past, and who can now apply a different lens to their businesses as a retail consultant, I would love to go where many others have and quickly chat about the demise of Department Stores. Here are three thought starters worth considering
1. “Echos in the halls”
For 7 + years department stores have thrown around the novel idea of consolidating their spaces. They need to move quicker. For all the times I have entered a Myer in the last 5 years, has anyone else noticed that there is an eerie silence in the air? There are far too much square metres to fill giving their shops the feeling of death. And of course, this amplifies their failure to properly staff their sales floors. Yes they have leases in place but they also have a lot of leverage over landlords…. for the short term anyway.
2. “Who do you think you are?”
Staff simply don’t care. And most of the time I can’t blame them. Understaffed, overworked and management continue to ignore those facts. Blood out of a stone… The biggest problem of these just listed? Management don’t acknowledge their teams – at least a passionate team member in a dire ambiance could still leave a lasting impression.
3. “Consumers in today’s throw away society want an experience – not just a product”
What experience are you giving to your customer? What senses are you appeasing? And no the delightful smell of moth balls doesn’t count. Many of the Myer store floor plates could house some amazing experiences. There is a vast amount of space that is full of products not returning the $ per square metre you would expect if you were running a stall in a flea market. Let’s try selling an experience. Let’s make some memories.
The verdict? Department Stores don’t have to be dinosaurs if they evolve. And many are moving far too slow.