Myer is in a trading halt after a report of tanking sales

Rob Elliott/AFP/Getty Images
  • Department store Myer has gone into a trading halt.
  • A report in the AFR says first quarter sales at Myer are down 5.5% year-on-year.
  • The retailer had stopped providing quarterly sales updates.

Myer went into a trading “pause” this morning following a report the department chain is still seeing a fall in sales.

A report in the Australian Financial Review says Myer sales continued to collapse in the three months to the end of October.

In a statement, the company said: “Myer Holdings Limited (MYR) refers to the article contained in today’s Australian Financial Review commenting on the Company’s financial performance. The Company is well aware of its continuous disclosure obligations and confirms it is in compliance with them.”

It added: “Trading in the securities of the entity will be temporarily paused pending a further announcement.”

The report in the Australian Financial Review says first quarter sales — which Myer no longer makes public — are down 5.5% year-on-year, and down 8.9% against the first quarter of fiscal 2017.

The “pause” in trading later turned into a longer stop. The company said: “The securities will remain in trading halt until the earlier of the commencement of normal trading on Tuesday, 20 November 2018 or when the announcement is released to the market.”

Myer in September posted an annual loss of $486 million, a sum bigger than the company’s entire market cap.

Revenue fell 3% to $3.1 billion and sales were down 2.7% on a comparable store basis.

John King, who was appointed CEO in June, then said: “Shareholders deserve better.”

The company has been cutting costs, ditching managers and executives, negotiating rent reductions and renegotiating its loan deal with banks.

But it has stopped making public quarterly sales updates.

This has infuriated some shareholders, including billionaire Solomon Lew whose Premier Investments, the largest shareholder with 10.8% of Myer.

His legal firm Arnold Bloch Leibler sent a letter to Myer earlier this month.

“No reasons were provided for the decision to reverse the historical practice of providing quarterly trading updates to the market,” says the letter from Jeremy Leibler, a partner at Arnold Bloch Leibler.

“Our client is extremely concerned about the implications of this decision.

“In particular, it appears that this policy change was made in bad faith for the improper purpose of depriving shareholders of important information while the company’s leadership and performance are being questioned. The timing of the decision supports this position.”

NOW WATCH: Money & Markets videos

Business Insider Emails & Alerts

Site highlights each day to your inbox.

Follow Business Insider Australia on Facebook, Twitter, LinkedIn, and Instagram.