| Type | Public (ASX: MYR) |
|---|---|
| Industry | Retail |
| Founded | 1900 in Bendigo, Victoria, Australia |
| Headquarters | Melbourne, Victoria, Australia |
| Key people | Sidney Myer, Founder Bill Wavish, Chairman Bernie Brookes, CEO |
| Products | Clothing, footwear, accessories, cosmetics, homewares, electrical, furniture, general merchandise |
| Website | Myer.com.au |
Myer is Australia's largest department store chain, retailing a broad range of merchandise including women's, men's and children's clothing, footwear and accessories; cosmetics and fragrance; homewares; electrical; furniture and bedding; toys; books and stationery; food and confectionery; and travel goods.
Contents |
The Myer retail group was started by Sidney Myer, who migrated from Russia to Melbourne in 1899 with very little money and little knowledge of English to join his elder brother, Elcon Myer (1875-1938), who had left Russia two years earlier. They opened the first Myer store in Bendigo, Victoria in 1900. After prospering, the second store opened in 1908.
In 1911 Myer purchased the business of Wright and Neil, Drapers, in Bourke Street, Melbourne, near the General Post Office, and a new building was completed and opened in 1914. From this base in Melbourne, Myer built Australia's largest chain of department stores, and the only chain with stores in all Australian states.
In 1918, the Doveton woollen mills at Ballarat were purchased, and in 1921 a new building fronting Post Office Place was added at Melbourne and in the following years Myer purchased adjoining properties, eventually building a store known as the Myer Emporium.[1] Myer expanded to Lonsdale Street in the 1920s.[2]
The Myer Emporium grew with the purchase of the old established businesses of Robertson & Moffat and Stephens & Sons. In 1925, Myer Emporium Ltd was listed on the Melbourne Stock Exchange and the new building on the Lonsdale Street frontage was begun. In Adelaide, in 1925, the company Myer SA Stores Ltd acquired a controlling interest in Marshall's department store and its shares continued to be listed on the Adelaide Stock Exchange until Myer Emporium Ltd made a successful takeover bid in 1966. A separate building in Queensberry Street, Melbourne, was put up in 1928, and the Collins Street businesses of T. Webb and Sons, china importers, and W. H. Rocke and Company, house furnishers, were bought and transferred to the Bourke-street building. By 1934, the public company had a paid-up capital of nearly £2,500,000. The company was then employing 5300 people with medical and nursing aid for the staff, and rest homes for them at the seaside and in the Dandenong Ranges.
On the death of Sidney Myer in 1934, leadership of the company fell to Elcon Myer, and on the death of Elcon in 1938, leadership went to their nephew Norman Myer. Norman Myer led the company until his death in 1956.[3]
Myer grew by developing its own stores (becoming one of Australia's major property owners and developers in the process) and acquiring other department stores, including Adelaide's Marshall's, Western Australia's Boans in 1984, Queensland's Barry and Roberts and in New South Wales they acquired Farmers & Co in 1961 and Grace Brothers in 1983.
In 1968, Myer acquired Geelong's Lindsay's stores,[4] renaming the business Target following the purchase of name and logo from US Target Corporation and positioning it as a discount department store chain.[5]
In 1983, Grace Bros. bought Myer NSW, and then in July of that year Myer acquired Grace Bros. Holdings Ltd.[6] The Myer store on Market and Pitt Sts in Sydney became the main Grace Bros. store.
In 1984, Myer acquired Boans Ltd,[7] the dominant Western Australian department store chain and embarked on a major redevelopment of its Perth City Store.
In 1985 the Myer Emporium (and Target, its discount department store) merged with GJ Coles & Coy forming Coles Myer Limited, then Australia's largest retailer.[8] Myer remained a distinct entity within the new corporate structure until it was sold in 2006.
At the post-Christmas sales in 1992, the glass doors to the Grace Bros Sydney City store were shattered by a stampede of shoppers.[9]
In 2000, Coles Myer CEO Dennis Eck, faced with lower sales and profits from Myer and Grace Bros. stores took the department stores down market, reducing service levels, increasing stock volumes on the selling floor and introducing product to appeal to younger consumers. In doing so, he ended up replicating the approach of another of Coles Myer's chains, Target. The resulting effect included reduced customer visits and reduced units sold per transaction. In 2001, Coles Myer set about to reposition the store to appeal to customers lost in the down market experiment.[10]
In 2003, one of the key changes made by the recently appointed Managing Director, Dawn Robertson, was to classify each Myer Grace Bros. store using a grid system referencing the socio-economic status of the area, its turnover and growth potential. Larger city-centre stores would rank at the top of the grid and smaller regional stores would rank at the bottom of the grid. The grid would affect the merchandise allocated to each store, rather than selling the same range of product in downtown Melbourne as in regional Queensland.[11]
On 13 February 2004, Grace Bros. stores were rebranded as Myer.[12]
In April 2004, Myer re-opened its Bondi Junction, New South Wales, store which replaced a former Grace Bros. store closed in April 2002 to make way for the redevelopment of Westfield Bondi Junction. It was the first Myer store to open in several years and incorporated new features such as white glossy floor tiles, extensive use of glass, and greater use of mannequins.
Under managing director Dawn Robertson, Myer began to target the Sydney market more strongly, to challenge the position of chief rival David Jones particularly in ladies fashion. In February 2004, Myer held its Sydney fashion parade the day before David Jones. On 9 August 2004, Myer staged a fashion parade open-air in Martin Place, gaining widespread attention, and again was held the day before David Jones' show.[13]
On 17 August 2005, Coles announced that within 12 months, it would decide to demerge, divest or retain Myer. Thirteen expressions of interest were made for all or part of Myer.[14]
On 13 March 2006, Coles Myer announced it would sell Myer to a consortium controlled by US private equity group Newbridge Capital, part of the Texas Pacific group. The consortium also included the Myer family, who held a 5% stake. The new owners, who also secured the freehold on the flagship Bourke Street store, indicated that they would not radically change the business, at least in the short term, and had no plans to redevelop the Bourke Street site as this would impact too heavily on profitability during the construction period. Texas Pacific also have interests in UK department store Debenhams and high-end US retailer Neiman Marcus. This sale was completed for $A1.4 bn on 2 June 2006.[15]
After being divested from Coles Myer (later Coles Group, then purchased by Wesfarmers), new owners Newbridge Capital and the Myer family appointed chairman Bill Wavish and chief executive Bernie Brookes, both formerly of Woolworths.
Beginning July 2006, Myer held a "History Making Clearance" to clear out excess stock deemed either unprofitable or unpopular, and reduced inventories from $1.5 billion to $750 million, and all store-specific warehouses were closed.[16]
Former Miss Universe Jennifer Hawkins began appearing in campaigns for Myer in 2006 and in January 2007 signed a $4 million deal to be the "face" of Myer for four years.[17]
Myer withdrew from the Coles Group part-owned FlyBuys rewards program on 1 February 2007.
In March 2007, Myer announced first half earnings before interest and tax (EBIT) of $123 million, an increase of 84% on the previous year. This represents a profit margin of 6.8%, compared with 3.9% in the previous corresponding period. According to chairman Bill Wavish, all Myer stores were now profitable, and all stores were more profitable than in the previous year.[18] Myer acquired four Harris Scarfe stores (including regaining a store it divested to Harris Scarfe in 1998) and took a minority shareholding in Harris Scarfe.
The Mymerch system, developed with IBM and Oracle, cost $99 million and was implemented early April 2007. Among other functions, Mymerch will beef up Myer's ability to carry out statistical analysis of customer habits giving it greater capacity to forecast sales trends and target promotions.[19]
Myer's profit turnaround was tempered in April 2007 by the loss of key staff. Bob Boutin, apparel director, Mark Bingemann, women's wear business manager and Jasmine Bingemann, footwear and accessories manager all resigned within a short period.[20] This followed reports of management dissatisfaction over the direction of the fashion business signified by the defection of designers such as Alex Perry and Tigerlilly to David Jones.[21]
In June 2007, a consortium comprising the Myer family, Colonial First State and GIC Real Estate (Singapore) announced it would be purchasing Myer's Melbourne CBD store. The Bourke Street part of the store was planned to be redeveloped by 2009, with Myer taking a 60-year lease,[22] but the development was not completed until March 2011.[23] The Lonsdale Street part of the store closed in 2009.
In September 2009, following rumours the previous month,[24] Myer indicated it would float the business at an indicative share price range of $3.90 to $4.90 when it listed on 2 November, giving it a market capitalisation between $2.3 billion and $2.8 billion.[25] The final issue price was $4.10,[26] but by August 2011 the stock had slumped to as low as $2.09.[27]
The MYER one program was introduced in August 2004 after Coles Myer discontinued its shareholder discount card the previous month.
It initially credited 1 point per $1 spent up to $2500 per annum; 1.5 points per $1 spent from $2500 to $5000 per annum; and 2 points per $1 spent for $5000+ per annum. Each 1,250 points accrued would earn the customer a $25 gift card, provided $1,500 was spent each year. With the relaunch of the Myer store card in November 2006, this changed to awards 2 points per $1 spent, regardless of annual spend, with 2,000 points required to receive a $20 gift card. Members who pay with a Myer store card receive an additional point per dollar spent. Customers also earn 1 point for every $1 spent outside of Myer when using the Myer Visa card. MYER one members are sent a quarterly update, in addition to special member offers, including discounts, a free copy of the "Myer Emporium" magazine, product samples and "gift with purchase" offers.
Myer revamped its MYER one program by introducing a graduated rewards system with three levels including MYER one, MYER one Silver and MYER one Gold. Each reward level is dependent on customer spend and confers exclusive benefits. In September 2010, Myer stated there were 3.7 million members and five million cards in circulation. Of these, over 20,000 had Gold status, spending over $7,500 per annum. Sales attributed to members accounted for 68% of total Myer sales. Gift cards valued at $51 million had been provided to members as rewards in the previous year.[28]
Myer originally had a store card managed by Australian Retail Financial Network (ARFN), sold in 1995 to GE Money.[29] This was superseded by a Coles Myer Card which could be used at all Coles Myer stores. This was augmented by the Coles Myer Source MasterCard, also managed by GE Money.
Following its sale, Myer relaunched the Myer card in October 2006 in conjunction with GE Money. According to GE Money, 125,000 accounts had been opened by August 2007.[30]
In November 2007, Myer launched a Visa credit card, also in conjunction with GE Money. Myer stated it was prepared to wear losses from the card for two years and that its objective was to drive increased loyalty from the card (which links with the Myer One card) rather than being profitable in its own right. It expected to sign 100,000 customers to the Visa card by November 2008.[31] Myer reported it had signed 15,000 customers to its Visa card in the first five weeks from launch, half of whom were converts from the existing store card.[32]
In 2007, the Coles Myer Card and Coles Myer Source MasterCard were renamed Coles Group Card and Coles Group Source MasterCard respectively and as such were no longer affiliated with Myer.
Myer has stores in all Australian states and the Australian Capital Territory. Stores are located in all the capital cities (except Darwin) and their suburbs, and selected regional towns and cities.
The flagship store is located in the Bourke Street Mall in Melbourne and is in the process of a $300 million dollar redevelopment which will be officially opened in April 2011.[33]
In 2006, Myer announced the opening of new stores, starting with four former Harris Scarfe stores (two in South Australia and two in Victoria).[16] Further to this, in 2008 in Sydney, Myer opened two new stores in Sydney at Westfield Eastgardens and Centro Bankstown replacing the former David Jones Limited stores, while David Jones Limited replaced the Myer store in Westfield Burwood, and stated it would open a store in the Stockland Townsville centre in early 2009 which didn't happen due to issues with buying of tenants for the land.
In 2007 Chairman Bill Wavish stated Myer was willing to build new stores if necessary, and that new locations could be in any city or town with a population over 40,000 people.[34]
On 22 September 2007, Myer's Liverpool Street building in Hobart was destroyed by a fire that is believed to have started in the cosmetic section. Estimates placed the damage costs at $50 million for the building alone with many millions more for all the stock which was destroyed. The building including its historic façade was subsequently demolished. The adjacent Murray Street building suffered substantial smoke and water damage. Within a day of the fire, Myer issued a statement saying it would be rebuilding in Hobart. They reopened the Murray Street section of their store on 16 November - 44 days after the fire.[35][36] Myer also stated that they will build a new store that may take up to 3 years to build and will add 2,000 m² of space. Whilst that development is taking place in the damaged part of the store, Myer will be using a site in Macquarie Street for departments unable to fit into the Murray Street building, in a Harvey Norman style "home store".
Myer opened a store in the redeveloped Top Ryde shopping centre in northern Sydney in 2010. There was previously a Grace Bros store at this centre from 1964 until closure in early 1985.[37]
In April 2008, Myer announced that it would open 3 new stores in Queensland. The first two stores were planned to open in 2010 at Westfield Garden City - Upper Mount Gravatt, Robina Town Centre with the third store planned to open in Mackay in 2011. Myer also announced that it would open a store at Stockland Green Hills - East Maitland in 2011 when the redevelopment was completed, later delayed until 2013.[38]
In July 2008, Myer stated it planned to expand into the Middle East and open its first overseas store in Dubai,[39] but by March 2009 had put such plans on hold.[40]
In September 2009, it was announced that three more stores would open at Tuggerah on the New South Wales Central Coast, Woden in Canberra and Robina on the Gold Coast, Queensland. In total, at the time of launching its prospectus, Myer stated it had signed conditional lease agreements for 12 locations to open progressively from 2010 to 2013[38] with a plan to reach 80 stores by 2014.[41]
In October 2007, Myer launched an online gift store, including electronic goods, perfumes, miss shop clothing and gift cards.[42]
In 2011 Myer launched an online shopping site, myfind.com based in Hong Kong (where there is no sales tax) for people in Australia.[43]
Myer will continue to operate Myer.com.au based in Melbourne where sales tax applies.
Womenswear is usually prominently featured within each store and will often be the largest department. Myer carries various mass market labels in womenswear, with a selection of designer clothing available only in city stores. Petite (short) and plus sized clothing is kept in separate areas to regular sized clothing. There are a large number of concession stores that sell women's clothing.
Cosmetics, Fragrances & Personal Care has a higher expenditure on labour, as most counters require their own staff and is usually positioned near the main store entrance.
Menswear is usually located on a separate floor to womenswear, the labels carried lie much more in the mid range. Unlike womenswear, the department has areas devoted to accessories, business shirts, suits, shoes and underwear. Designer and concession brands are available in selected stores, as is formal hire.
Fashion Accessories houses women's handbags, scarves, hats, belts, purses/wallets, jewellery, hosiery, socks; women's & men's watches and sunglasses.
The range of men's and ladies' shoes carried varies by store. Designer shoe ranges are only available in limited stores.
Intimate Apparel section sells women's underwear, lingerie, sleepwear and gowns. Some staff are trained in fitting bras, and occasionally some underwear brands will have a fitter in store to give advice.
Homewares includes cookware, kitchenware, tabletop (dinnerware, glassware & cutlery), manchester and napery. Usually extremely busy during sales, this department also contains the Gift Registry.
Miss Shop and Men's Youth departments are targeted for shoppers ages from mid-teens to early thirties. Different music to the rest of the store is played within these areas. There are also music videos showing either in fitting rooms or on the shop floor. Merchandising principles are relaxed from what is required in womenswear and menswear; and abstract fixtures and visual displays are often used. For example, items can be hung sideways on hangers, mannequins are sometimes dressed "messily" or clothes may be stacked on chairs and milk crates.
At the Melbourne City store, both these departments are located in "The Basement" and is much larger than in other stores, at almost 6,000m2.[44] The staff are dressed casually to reflect the youth target market. There are also a small number of concession stores within this area. The concept has been expanded to selected stores - such as Warringah Mall, Chatswood, Parramatta, Sydney City, Perth City and in the new Murray Street store in Hobart, but generally on a smaller scale.
Childrenswear is separated into babywear, boyswear and girlswear.
In July 2004, Brazin Limited, which operates Virgin Megastores Australia, entered into an agreement with Myer to create Virgin entertainment locations in Myer stores. Under the agreement, Myer stock was acquired and Myer pre-recorded audio and video departments were re-branded to Virgin. Virgin has not renewed its concession agreement with Myer and from mid August 2010, Virgin entertainment ceased operations within Myer stores. The departure of Virgin Entertainment coincided with the release of a new 'My Entertainment' in some old Myer locations with reduced stock levels compared to Virgin. Myer intends to close its DVD / CD depts, by the end of 2011.
Myer operated its own direct mail order company, Myer Direct, from 1989 until its sale to Ezibuy in January 2002.