skc
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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.
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
RICHARD BROOK UMBERS
Total consideration 3 September 2015 - $100,002 .83
Total consideration 7 September 2015 - $99,997.43
On market trade
One directors confident and smart
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!!!!!!!!!!!!
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!!!
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.
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!
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.
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.
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?
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!
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.
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.
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.
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
So I wonder, why dont people shop at Myer anymore, and where do they shop instead?
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
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.
Like a chook raffle on a 40 degree day you never know what your going to get
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