Myer has today announced a $600 million, five-year “New Myer” strategy, aimed at reviving the struggling department store to deliver a “sharper and more focused range” of products and services.
The retailer will turn to shareholders to help raise $221 million in order to cut debt and fund the proposed transformation of the department store. The entitlement will be offered at $0.94 per share, a 22% discount on last trading price.
The new strategy comes after the retailer announced a net profit for the 2015 financial year of $77.5 million, down 21.3% from last year.
“The New Myer strategy is built on providing a more focused and relevant merchandise offer to serve a more valuable customer and a better shopping experience for everyone who comes to our stores,” said chief executive Richard Umbers.
“The challenges facing the retail sector are well known, and we understand them deeply. Our strategic response to these issues defines a clear agenda for success.
Total sales were up 1.7% to $3.195 billion and the outlook for 2016 is for weaker profits between $64 million and $72 million.
The new strategy will see British brand Topshop Topman sold in the department store from November, and an improved in-store customer experience delivered through improved effective use of digital and Myer one and new “omni-channel” shopping.
The introduction of Topshop will to compete with arch rival David Jones' raft of mid-market brands such as Seed, FCUK, Mimco and Country Road. David Jones reported a 28.8% increase in operating profit to $161 million for the 2015 financial year, and have recently dropped more than 180 labels, ramping up more mid-range offerings.
Umbers said the Topshop announcement is a “powerful validation of Myer’s commitment to delivering inspiring brands and wonderful experiences as we set out to bring the love of shopping to life.”
Myer will also make a 25% investment in the Australian Topshop Topman franchisee and will roll out concessions in more than 20 stores.
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