While Australia’s retail industry has been doing it tough, department store stalwart Myer has managed to stay afloat with the implementation of good management strategies.
Earlier in the year, Myer‘s CEO Bernie Brookes announced that the floundering department store was looking to its omnichannel strategy to drive growth in general. With consumer sentiment remaining low this year, Myer’s recent earnings results prove that its doing something right, even if it isn’t all down to internet sales.
The results appear better than what Brookes had predicted thanks to a stronger-than-expected second half. While full-year earnings were still down (EBIT -11.2%), the second half slide was much more mild (EBIT -4%). However, the truly positive indicator is that Myer’s gross profit margin rose to 41.31 percent.
Good Management has Buoyed Myer’s Profit Results
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There are several strategies that have been at play to produce the department store’s optimistic outlook. While omnichannel retail is among them, it can’t be said to have the most profound effect. Rather, a mixture of good product purchasing decisions and consequent pricing strategies define any positive outcome.
Brookes has been focused on delivering more in-house branded product or Myer ‘exclusive’ labels, which gives the retailer better margins and better control. No longer getting caught in the seasonal trap of discounting truckloads of inventory in order to move excess stock, Myer has been able to ease pressure on the bottom line.
And while Gerry Harvey blusters that Myer’s omnichannel strategy is no more than “spin”, the retailer has managed to present 30,000 SKUs via its website, doubling online sales over the course of a year. These online figures continue to rise for Myer, and with its CEO focused on reaching an online target of 8 percent of total sales, the strategy looks set to fuel further profits.
Eventually (we hope), the retail industry will reach a turning point and consumer sentiment will have a resurgence. When that happens, Myer appears well placed to take full advantage.
via Myer’s Management Delivers Promising Results | Power Retail.