Fear + Greed – what went wrong at Myer
I joined Sean Aylmer on Fear + Greed yesterday to discuss Myer’s disappointing announcement of a 30 per cent decline in profit, which was followed by a 25 per cent drop in its share price.
So, what went wrong?
As a traditional bricks-and-mortar department store, Myer has been grappling with significant challenges. Its move into the highly competitive online retail space has brought debt and complex integration issues, while also placing it in direct competition with pure-play online retailers.
The company is now facing rising marketing costs, particularly related to its digital transformation, along with substantial expenses linked to its loyalty program. At the same time, cost-of-living pressures are prompting consumers to cut back on discretionary spending, resulting in lower foot traffic through stores. Many customers are also choosing to buy directly from brands online, bypassing department stores altogether.
Compounding these issues, Myer has struggled to keep pace with rapidly changing fashion trends and the fast cycles of online retail.
Management has described this as a period of transition, with a focus on positioning the business for long-term growth. However, the broader challenge remains: traditional department stores are fighting to stay relevant in an evolving retail landscape.
Listen to the full episode here:
Roger Montgomery is the Founder and Chairman of Montgomery Investment Management. Roger has over three decades of experience in funds management and related activities, including equities analysis, equity and derivatives strategy, trading and stockbroking. Prior to establishing Montgomery, Roger held positions at Ord Minnett Jardine Fleming, BT (Australia) Limited and Merrill Lynch.
He is also author of best-selling investment guide-book for the stock market, Value.able – how to value the best stocks and buy them for less than they are worth.
Roger appears regularly on television and radio, and in the press, including ABC radio and TV, The Australian and Ausbiz. View upcoming media appearances.
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