MYR - Myer Holdings

[skc]

What do you guys think, is Myers heading to its grave? Hard to believe one of Australia's most recognizable brands is down so much... yet suppose with the online shopping boom there is not really any place for a company like myers anymore.

May be there is hope afterall....

FED: David Jones' new owner makes big changes

By Drew Cratchley
SYDNEY, Aug 27 AAP - Sales at David Jones have soared under its new South African
owner, which says it wants to turn the retailer into one of the world's best.
South Africa's Woolworths bought David Jones for $2.1 billion in 2014, and after
taking control in August has significantly improved its sales performance and delivered
an operating profit of $161 million.
David Jones' last annual profit reported as a publicly listed company was $95 million,
in 2012/13.
Sales grew 10.7 per cent in the six months to June, as almost 200 brands were taken
off David Jones' shelves and excess stock was reduced.
The amount of floor space dedicated to Woolworths-owned labels, including Country
Road, Witchery and Mimco, was also increased.
Woolworths chief executive Ian Moir said he has big plans for David Jones, including
huge improvements in customer service.
"The customer experience has got to be the best in Australia, and as difficult as this
sounds we want it to be the best in the world," he said.
"We'll be spending a lot of money, achieving that is more important than anything
else."
New stores will also be opened, but with different formats than many customers are
used to, such as the recently flagged concept store at Sydney's new Barangaroo
harbourside precinct.
"We see real growth for that business and we see ourselves driving a better
relationship with the customer, driving much higher turnover, taking more market share
and employing many more people," Mr Moir said.
Plans to sell the company-owned flagship Market Street store in Sydney's CBD and
Bourke Street store in Melbourne are continuing, with the funds to be used for a major
transformation of those sites once they are leased back.
"What we want to do is we want to have bigger businesses, with more on offer, more
exciting environments, with a higher turnover than we currently have," he said.
While the Australian economy appears set for challenging times, the higher income
consumers David Jones is targeting are proving resilient, Mr Moir said.
AAP dmc/bt

 

[notting]

One directors confident and smart

RICHARD BROOK UMBERS
Total consideration 3 September 2015 - $100,002 .83
Total consideration 7 September 2015 - $99,997.43
On market trade

 

[tech/a]

One directors confident and smart

Part of a package?
Not necessarily smart.
May not have a choice.
Often Director buying is not
as it appears.

 

[notting]

It's an on market purchase for his families super fund. Not a package thing. Even so directors have a history of buying their own story a bit too enthusiastically at times, but I think it's smart because Myer is trading as if it is about 10 empty giant shipping containers sitting in shopping centers with the word Myer written on them and nothing else happening.

 

[notting]

People seem to have forgotten that Lew bought a few. Time to put the house on it, sit back and wait for him to come back home!!!!!!!!!!!!

 

[Miner]

People seem to have forgotten that Lew bought a few. Time to put the house on it, sit back and wait for him to come back home!!!!!!!!!!!!

Notting
wonderfully who says you have dyslexia ?? You are the only one who has posted back in 2015 and now again in 2017. Lew or No Lew. Visiting the MYER shop - it is painful. Demotivated sales force (WA I am referring) just waiting to be sacked. The product line is terrible. Prices are terrible. I can buy the fragrances at half price of same brand from Chemists Warehouse. Why pay colossal money to models like Jennifer Hawkins and alike. There are beautiful models at very low price to represent the mass and hence to sell the product.
Same Anglo Saxon high price models not recognising the Australian demography has changed. What is needed a big kick to oust the current board and senior management and have a thorough overhaul? I used to hold and sold out at loss. The only incentive of some one to take over. But with Amazon fever, I do not see any near uplift of MYER. But I have been proved wrong many times. So this could be no exception.

 

[galumay]

I love a good contrarian, turn around, play as much as...anyone...but I cant say Myer has piqued my interest.

I guess I should at least run my ruler over it so I can have an opinion!

I do think the threat of online/Amazon to traditional retail has been over rated. The trick is picking the retailers that will survive the shake up and emerge with good businesses on the other side.

 

[notting]

I think about this this way.
Lew's stuff is going fine in terms or retail performance independent of share price which is also relatively strong and he has taken a first bite of Myer.
He has probably the best understanding of Myer than anyone and the skill and track record of how to make retail in general work in the current environment.
He seemed happy to go nuts on it up to around $1.25
So say what ever you like about 'Myer,' your not Lew!!!

 

[skc]

I think about this this way.
Lew's stuff is going fine in terms or retail performance independent of share price which is also relatively strong and he has taken a first bite of Myer.
He has probably the best understanding of Myer than anyone and the skill and track record of how to make retail in general work in the current environment.
He seemed happy to go nuts on it up to around $1.25
So say what ever you like about 'Myer,' your not Lew!!!

FWIW, I think Lew's Smiggles will be in trouble soon. I have a 6 year old daughter so I frequent Smiggles a fair bit. Yes it has the fan fare of little kids... but gosh are the items over priced or what? You can usually get the same/equivalent colourful stationary down the mall at Big W for about 1/3 of the price. Imitation might be the highest form of flattery... but it's also bad for margins. I can't help but notice that sales are more frequent at Smiggles these days.

On Lew taking over Myer... the possibility certainly exist and I won't bet against Lew for having a go. But it's difficult to see which lever exactly he can pull to generate sustainable competitive advantage. May be there are cost efficiencies to be had and synergies to extract...but what else is there?

I do think the threat of online/Amazon to traditional retail has been over rated. The trick is picking the retailers that will survive the shake up and emerge with good businesses on the other side.

Myer and department stores in general has been dying a slow death even before any hint of Amazon hitting our shores. Myer has tried lots of tricks... upmarket, private label, mass premium and now using in store "experience" to drive foot traffic. That's nothing new... Google Jen Hawkins wardrobe malfunction and you will see that in store experience peaked some years ago!

 

[notting]

Oh don't worry, I am well and truly across the Jen Hawkins wardrobe total function. I've probably watched it about 480,000,000 times and that was on the day it happened. Apart from that.

Lew knows what to do and is not silly with his money!
As far as Myer goes he can create plenty of synergies and with that it doesn't have to become what it was in size or even in what it did. It just needs to work on some level with a new format that foot traffic retailers will get right at some point. Who knows maybe Lew could get into bed with Amazon and make it a giant, try it all on at MYER thing.
Another thing to consider is just how bad Virgin hurt Qantas as a cheaper no frills disrupter 17 years ago as that made little or no money. Where is Virgin now that they have to run as an actual business rather than a disrupter. Big difference. Amazon has started to turn a profit but compaired to it's market cap PHhhhhh.
But if we believe in Amazon we should buy XRO. Same template!

 

[skc]

Who knows maybe Lew could get into bed with Amazon and make it a giant, try it all on at MYER thing.

That's actually not a bad idea... not sure there's much money in it for MYR but a great use of the space.

Another thing to consider is just how bad Virgin hurt Qantas as a cheaper no frills disrupter 17 years ago as that made little or no money. Where is Virgin now that they have to run as an actual business rather than a disrupter. Big difference. Amazon has started to turn a profit but compaired to it's market cap PHhhhhh.

Yes and no... Virgin was never quite as big as Qantas and it has too many startegic shareholders to act in a coherent manner. Amazon on the other hand (yes it's most probably very overpriced) has no master to answer to but itself. It's funds are internally generated and there's no implicit commitment to direct any of the operating cashflow to investors. It is also a massive behemoth relative to most retailers.... like playing a game of chicken driving a Hyundai Excel against a freight train.

But if we believe in Amazon we should buy XRO. Same template!

I am sure XRO has an out... they just need to raise their prices once a steady state market share is achieved. The switching cost is so high that a creeping $2 per month every year will see little customer churn but the higher revenue will drop straight to the bottom line. I am not saying it's a great buy at these levels... but I can see how this market cap can be sustained down the line.

Oh don't worry, I am well and truly across the Jen Hawkins wardrobe total function. I've probably watched it about 480,000,000 times and that was on the day it happened. Apart from that.

 

[notting]

I am sure XRO has an out... they just need to raise their prices once a steady state market share is achieved. The switching cost is so high that a creeping $2 per month every year will see little customer churn but the higher revenue will drop straight to the bottom line. I am not saying it's a great buy at these levels... but I can see how this market cap can be sustained down the line.

I was pretty harsh XRO and did well shorting it at 40 ish, but now when you think of the Amazon model it could be A pretty awesome close your eyes, bottom draw it and set an alert for 90 or something. Like you suggest who wants to change the accounting system to save a few bucks. A lot harder than clicking on ebay instead of Amazon which I do regularly.

 

[craft]

FWIW, I think Lew's Smiggles will be in trouble soon. I have a 6 year old daughter so I frequent Smiggles a fair bit. Yes it has the fan fare of little kids... but gosh are the items over priced or what? You can usually get the same/equivalent colourful stationary down the mall at Big W for about 1/3 of the price. Imitation might be the highest form of flattery... but it's also bad for margins. I can't help but notice that sales are more frequent at Smiggles these days.

A few years ago my girls when around the same age used to drag me into Smiggle - Same deal the stuff was way over priced and available much less elsewhere. Still the result was cute passionate 6 year old - score 1, logical rational adult consumer score 0. I somehow suspect your effort probably leaves us oldies down down 2 - Nil. Maybe not in trouble as quick as you would imagine - although the magic, whatever it is could just vaporise if the kids move on - but it won't die from competitors squeezing margins.

On Lew taking over Myer... the possibility certainly exist and I won't bet against Lew for having a go. But it's difficult to see which lever exactly he can pull to generate sustainable competitive advantage. May be there are cost efficiencies to be had and synergies to extract...but what else is there?



Myer and department stores in general has been dying a slow death even before any hint of Amazon hitting our shores. Myer has tried lots of tricks... upmarket, private label, mass premium and now using in store "experience" to drive foot traffic. That's nothing new... Google Jen Hawkins wardrobe malfunction and you will see that in store experience peaked some years ago!

Myer should be a decent platform and size to access a range of large third party brands that both want to be merchandised as part of their brand build and can control and are prepared to differentiate their wholesale price based on merchandise presence rather than just volume.

Long-term viability probably requires a paradigm shift in supplier relationships to dramatically lower the cost of goods compared to online competition rather than squeeze more out of the operational cost base. PMV board probably better placed to seek out the new model than MYR but still high risk.

 

[skc]

A few years ago my girls when around the same age used to drag me into Smiggle - Same deal the stuff was way over priced and available much less elsewhere. Still the result was cute passionate 6 year old - score 1, logical rational adult consumer score 0. I somehow suspect your effort probably leaves us oldies down down 2 - Nil.

I just tell my daughter that, if she wants some gel pen, she can get a pack of 20 from KMart or a pack of 4 from Smiggles for the same price. And I will discuss with her until she agrees with me that getting 20 is the rational decision. Then I will tell her that she will only get it when she achieves whatever it is that I want her to achieve at that point in time (like no morning meltdowns for X weeks). You can get a lot of operational leverage from kid stationaries ...

Maybe not in trouble as quick as you would imagine - although the magic, whatever it is could just vaporise if the kids move on - but it won't die from competitors squeezing margins.

I guess the point to note is that there are now kid-approved alternatives available, which wasn't the case 12 months ago. I don't think I've ever bought anything from Smiggles that's not on sale. However I do agree that not all parents behave the same way... if I extrapolate my own personal spending habits to the entire population there would be no retail sector to speak of.

Long-term viability probably requires a paradigm shift in supplier relationships to dramatically lower the cost of goods compared to online competition rather than squeeze more out of the operational cost base. PMV board probably better placed to seek out the new model than MYR but still high risk.

I agree that some kind of new retail model is needed for a MYR takeover to make sense. I just don't know what it is and haven't heard anyone coming up with a viable one offshore either.

 

[galumay]

Myer and department stores in general has been dying a slow death even before any hint of Amazon hitting our shores. Myer has tried lots of tricks... upmarket, private label, mass premium and now using in store "experience" to drive foot traffic.

Which begs the question, why? Also, where did that market share go because while moderate, there has been overall growth in the sector.

I am in no position to try to answer the question, I live in an extremely remote corner of Australia with the nearest shopping center about 1300kms away by road....when you can actually drive out which is only about 6 months of the year! Also the tropical climate makes most clothing redundant and my major retail spending is stuff for fishing and boating - and we do have a tackle shop!

So I wonder, why dont people shop at Myer anymore, and where do they shop instead?

 

[craft]

I just tell my daughter that, if she wants some gel pen, she can get a pack of 20 from KMart or a pack of 4 from Smiggles for the same price. And I will discuss with her until she agrees with me that getting 20 is the rational decision. Then I will tell her that she will only get it when she achieves whatever it is that I want her to achieve at that point in time (like no morning meltdowns for X weeks). You can get a lot of operational leverage from kid stationaries ...



I guess the point to note is that there are now kid-approved alternatives available, which wasn't the case 12 months ago. I don't think I've ever bought anything from Smiggles that's not on sale. However I do agree that not all parents behave the same way... if I extrapolate my own personal spending habits to the entire population there would be no retail sector to speak of

Wow 6-year-old female and you’re still the manipulator not the manipulated. Your'e impresive – But she will lift her game.

Ultimately, she and her peers will decide the future of Smiggle and I remain doubtful it will be on grounds of parent rationality. Kid apporved alternative sounds more ominous if that's correct.

You probably don’t realise yet that despite being a rational person you will at some stage buy her $100 pyjamas from Peter Alexander instead of 10 pairs from Target– unless you can rationalise with or break the heart of a teenager.

Overpriced crap desired by those that don’t yet have to balance their own money is one retail model that seems to work – at least until it loses its peer desirability.

 

[McLovin]

So I wonder, why dont people shop at Myer anymore, and where do they shop instead?

The problem with all these old school retailers (especially department stores) is that they still believe in corralling the customer into their store. It's no doubt different for you being in a regional area, but I can pretty much get anything I want delivered in 24 hours. The Iconic delivered me a pair of pants and a shirt last Friday within 3 hours of my ordering them ($13 charge or free if I can wait until the next day) . I can have appliances delivered next day when ordering at night (free delivery).

Contrast that to Myer...

STANDARD DELIVERY

• FREE delivery on orders $100 or over or $9.95 for orders up to $99.99

• 4-7 business days Australia- wide; including Metro and most Regional areas

• 7-10 business days for Regional Western Australia, Queensland and Northern Territory



BIG AND BULKY DELIVERY

• Big and Bulky refers to the delivery of large merchandise items (Furniture, beds and large appliances)

• Flat fee of $65 delivery per Big and Bulky item ordered

• 7 –14 business days; available in metropolitan areas

Quite simply, imo, their competitors have more variety, better service and faster, cheaper delivery.

When Amazon Prime arrives and I can literally get everything including a kitchen sink delivered in 3 hours who is going to bother with Myer? Even in shopping centres in the capital cities, the variety has exploded over the last 7-10 years, so there isn't much incentive for shoppers to get lost in a department store.

I don't have the answers on how to fix MYR, but surely recognising the internet as a real, competitive sales channel is a step in the right direction. It just seems to show how out of touch they are with anyone under 40.

 

[skc]

You probably don’t realise yet that despite being a rational person you will at some stage buy her $100 pyjamas from Peter Alexander instead of 10 pairs from Target– unless you can rationalise with or break the heart of a teenager.

Where is that :Oh how I dread this day: emoticon?

Overpriced crap desired by those that don’t yet have to balance their own money is one retail model that seems to work – at least until it loses its peer desirability.

I have a small holding in LOV and it is one of my key risk factors... will their reasonably-priced crap lose peer desirability soon?

 

[Quant]

Holding MYR into reporting not my thing . Like a chook raffle on a 40 degree day you never know what your going to get

 

[notting]

Like a chook raffle on a 40 degree day you never know what your going to get

Just tryen it on....