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Myer’s discounted sales rise as profits shrink and restructuring continues
David Jones’ collapse into administration has raised concerns about whether Myer could face the same fate, as both Australian department stores struggle to stay relevant and profitable. Myer has been relying on heavy discounting to attract shoppers, which has lifted sales but squeezed profits.
Myer’s sales rose by double digits to $4.1bn last financial year, largely because it added five clothing chains bought from Premier Investments, rather than because customer demand surged. The retailer ended the year with $100m in net cash and has reduced its store count from 60 to 56, giving it more time to restructure than David Jones had. Its shares are around 24 cents, compared with a $4.10 float price, while analysts disagree on whether discounting can support a lasting recovery.
In short
- Myer’s sales growth came largely from acquisitions.
- Heavy discounting is supporting sales but hurting profits.
- A $100m cash buffer gives Myer time to restructure.
Read the full article at the source →
Originally published by The Guardian as “David Jones’ future looks grim. Is Myer next?”.