Myer has been working hard to pick up its retail game.
In the past year, shares in the iconic Australian retailer have been falling, with profits down 23% in the first half of the year. A huge management shakeup in March saw the exit of Myer CEO Bernie Brookes with the head of the retailer’s supply chain, Richard Umbers, stepping into the role.
As part of its new retail direction, Myer further announced the closure of its Top Ryde store in Sydney as well as another three stand-alone specialty stores in Melbourne.
In a recent presentation for clients, Morgan Stanley analyst Tom Kierath took investors on a video tour through a Myer store in Sydney’s CBD, to show the strategies to drive sales density and customer traffic ahead of Christmas.
It gives a good insight into what an equities analyst looks at when they see a company: how the company is trying to drive sales, how it’s managing its space (a critical asset) and how it is deploying its capital.
From bringing in more “wanted” brands, targeting capital expenditure through to making concession labels available to customers online, here’s a look at some of the changes Kierath noted, with screengrabs of him highlighting each of the elements.
In recent months, Sydney’s flagship Myer store on Pitt Street has undergone a number of refurbishments and range overhauls to improve the in-store experience.
One of the changes in store to drive sales density and more customers into store has been taking exclusive brands which used to occupy the area near the escalators — considered to be prime selling areas — and replacing them with brands such as Herringbone, Country Road and MJ Bale.
“One of the problems that Myer has had over the years has been that concessions haven’t been on the website,” Kierath explains. Rodd & Gun was one of the first concession stores to be available on Myer’s website just a few months ago, meaning that customers had greater access to a broader range of brands when they shopped online.
Another change has been bringing in 40-50 “wanted” brands with European menswear label Jack & Jones being one of them. Myer has brought in 300 new brands in total into the business since July to drive traffic into the store.
Kierath says that visual merchandisers have been trying to “create some excitement” with the wanted brands in their display of TOMS shoes — a popular brand that’s currently stocked in 20 stores.
Up on Level 6, Kierath says that Giftorium has been given an upgrade since it was launched last year. “It is one of the areas where capex is being more targeted. In the old days, Myer used to spread capex very thinly across all different parts of the business, now it’s a lot more targeted. You can see that the spend on Giftorium is there to drive sales especially around Christmas time.”
It is hoped that the introduction of these new retail strategies will help the struggling department store chain respond to the new retail environment.
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