Myer sales plummet 3.5% to $ 681.4m for first quarter 2012. Total sales fell 2.7% which the retail giant attributed to its decision to rationalise electronics offering which was continuing to affect sales, which like for like fell 5.1% for the August – October trading period.
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However, Myer expects the freed up floor space to deliver higher margin return goods:
“These decisions are expected to result from sales in higher margin categories as floor space is reallocated,” Myer said in a statement today.
The ‘rationalisation’ is expected to be complete by H1 2012.
Womenswear and youth brands were the strongest sellers over the period, while “online sales continued to grow” with Myer customers “responding well” to the free delivery offer.
And it has big plans for its online store ahead.
“As part of our focus on becoming a leading omni channel retailer, the first phase of our website rebuild is underway with some improvements already implemented.”
However, Myer anticipates full year sales to be “flat” and net profit (after tax) to drop as much as 10 percent below full year 2011 figure of $162.7m.
CEO Bernie Brookes admitted trading conditions continued to be “challenging” but said the fall was in line with expectations.
However, it wasn’t all doom and gloom for Brookes. “Pleasingly, as the quarter progressed sales gradually improved against last year,” he said.
He also welcomed last weeks interest rate rate cut “as we head into the critical Christmas period” and hopes it will be the impetus to send consumers running for the post Christmas sales.
“We are also confident out customers will respond well to our new Summer ranges as well as our reinvigorated Stocktake Sales commencing on Boxing Day,” he added.
This comes as retail giant Westfield admitted “challenging trading conditions” in its latest results this morning, reporting just a 0.1% rise in sales to $21.5bn for Australian retailers under its roof compared to last year.
Department stores including the likes of David Jones and Myer were the biggest losers – with sales falling 7.5% over 12 months, with supermarkets (+2.5%) and speciality stores including ‘leisure’ (3.5%) and ‘general retail’ (+4.4%) faring better.
And in spite of the closures of major names like Borders, Colorado and Angus and Robertson, the retail space is now occupied, it said.