Department store Myer has announced a wave of redundancies and the vacation of an entire floor of its head office as part of a new push to revive the rapidly deflating business.
The announcement comes a month after the century-old Australian institution revealed shocking sales figures in the lead-up to Christmas.
Myer has not published final sales figures for the whole of December – which will include the all-important Boxing Day sales period – but the language of Thursday’s announcement suggested the news will not be good.
The ‘restructure’ announced on Thursday will attempt to shift Myer’s focus so it can compete with e-commerce disruptors such as Amazon.
It will include a major downsizing of staff and the vacation of another floor of the management head office on Melbourne’s Collins Street.
In the space of two-and-a-half years, Myer has vacated four-and-a-half floors, or 40 per cent, of this office – a fact that succinctly summarises its woes.
The biggest casualty in the restructure is chief financial officer Grant Devonport, who will leave the company after just two-and-a-half years in the job. He will be replaced by Nigel Chadwick.
Beyond Mr Devonport, Myer did not reveal the exact number of redundancies in its release, saying simply that there would be “a number of departures across the support office”.
Myer did not respond to The New Daily’s request for comment.
Chief executive Richard Umbers said: “Recent trading conditions have been tough, in part as a result of reduced traffic to physical stores.
“In spite of this, we have continued to make good progress on our transformation agenda, improving range and service to customers, building a high growth omni-channel business and improving productivity and efficiency.”
Taking on the e-commerce disruptors
Reading between the lines, the strategy was clearly an effort to compete with the likes of Amazon.
The Seattle-based e-commerce juggernaut is now operating in Australia, and already stealing market share off local retailers.
Competing aggressively in the e-commerce market is now a matter of life or death for Myer.
The focus on e-commerce was particularly clear in the appointment of digital specialist Mark Cripsey to the newly-created role of chief operating officer.
Before joining Myer in 2015, Mr Cripsey was in charge of Coles Online, overseeing the supermarket’s online order and delivery business.
Prior to Thursday’s promotion, Mr Cripsey has been in charge of ‘digital and data’ at Myer.
Mr Umbers said the appointment reflected “the importance of digital and data across the whole business, and the need for us to seamlessly integrate our physical and online offers”.
Mr Umbers put extra stress on ‘data analytics’ – that is, analysing customer behaviour and buying habits and marketing to them accordingly.
This is a sector in which Amazon and eBay have led the way, leaving bricks-and-mortar competitors like Myer at a real disadvantage.
Myer has taken a number of steps to compete in this space, most notably with the launch in December of the Myer Market, an online marketplace that allows third-party sellers to market their products through Myer in exchange for a slice of each sale.
It’s the same model used by Amazon Marketplace, which launched in Australia in late 2017.
But neither shoppers nor investors have been impressed by Myer’s efforts to modernise its business.
Myer’s November sales were down 2.3 per cent on the previous year, and down 5 per cent in the first two weeks of December.
Investors, meanwhile, responded to Wednesday’s announcement by selling Myer stock, resulting in a 1.5 per cent drop in value.
One Myer share is now worth 65 cents, a spectacular slump from its 2010 high of $3.20.