MYER and David Jones will continue to suffer from lacklustre sales in 2012, as nervous consumers limit their spending during the critical trading period after Christmas, say analysts.
Capping a horror stretch for the retail industry, analysts at Goldman Sachs yesterday cut their earnings forecasts for the nation's two biggest department stores, and predicted weak confidence would limit consumer spending.
Despite retailers' attempts to convince consumers to spend, analysts Phillip Kimber and Gabriel Wilson-Otto downgraded their 2012 profit forecasts for Myer by 14 per cent and David Jones by 9 per cent.
Spending on non-essential goods would remain weak in the crucial months of December and January because people lacked confidence and falling house and share prices would weigh on consumers, the analysts said.
The big department stores earn up to half their annual profits during December and January, and Myer yesterday brought forward the start date of its ''Boxing Day'' sale from December 26 to Christmas Eve.
However, Goldman's retail analysts said a bounce in consumer spending was unlikely until later next year, and they cut their forecast for Myer's 2012 after-tax profits by $20.8 million, to $129.8 million. The bank's forecast for David Jones' profits was cut by $12.2 million, to $126.5 million.
Goldman's view on Myer shares - which yesterday touched a record low of $1.95.5 - was cut to ''hold'' from ''buy''. The rating on David Jones was cut to ''sell'' from ''hold''.
Myer yesterday brought forward the start date of its ''Boxing Day'' sale from December 26 to Christmas Eve.
Apparently a hoax!
EBPE’s proposal is said by EBPE to be A$1,650 million for a 100 percent acquisition of David Jones
and is described in the letter received by the Company as being based upon “…$850m of equity
provided by the EBPE led consortium, $450m of lending provided by a syndicate of banks and
investment institutions and $450m in residual equity for the existing David Jones Limited
shareholders, a portion of this residual equity shall be underwritten”.
Apparently a hoax!
What's to stop someone taking a huge long position on BHP one day, making a "takeover bid", selling into the crowd then retracting the bid? You'd just have to get your second cousin's best friend from Siberia to place the trades for you.
Media reports today that Myer and DJS could merge.
DJS released an announcement saying it is not in any current such discussions, although on 28/10/13 Myer did approach them with an offer.
Guesses on effect of SP?
I am so glad that I didn't put on that long MYR short DJS trade. That will get blown out of the water tomorrow.
Got out of my DJS short on tuesday(for a profit too )
Excellent timing. Do you use a timing method V.S or was it the patterns that made you take profit?
When and why did you short...same question as to why you closed the position.
That was unexpected!
Myer has been blindsighted by a South African "Woolworths" putting in a bid (which has been recommended by DJS) for $4 cash per share.
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