The future of Australia’s iconic department store Myer hangs in the balance, as a retail expert warns that the next 12 months could be pivotal. This caution follows a dramatic decline in profits, store closures, and a significant drop in share prices.
The 124-year-old retail chain announced on Tuesday that its operating profit had fallen by nearly a third in the year leading up to July 26. The company attributed this downturn to sluggish consumer spending and challenging economic conditions. In response, investors rapidly sold off Myer stock, causing shares to plummet by 15% at the opening of the day’s trade, with losses deepening to 29% by midday, leaving shares trading at just $0.46.
Myer’s operating profit after tax decreased to $36.8 million, a 30% drop from the previous year. The retailer also reported a $211.2 million statutory loss, primarily due to a writedown in the value of five fashion brands acquired from Premier Investments: Just Jeans, Jay Jays, Jacqui E, Portmans, and Dotti. Consequently, the company declared no final dividend for shareholders.
Leadership’s Optimism Amid Economic Struggles
Executive Chairwoman Olivia Wirth sought to calm investor concerns, describing 2024-25 as a ‘transition year’ as Myer integrates its new brands and implements $30 million in cost reductions. “Despite challenging macroeconomic conditions and tough retail markets in Australia and New Zealand, we achieved positive sales growth in our first period as a combined group,” Wirth stated.
However, retail expert Dr. Gary Mortimer cautions that time is running out for Myer. He noted that sales for the newly acquired brands were either stagnant or declined during the second half of 2024-25. “It’s only year one of the acquisition, so it will be interesting to see how the next 12-24 months play out,” Dr. Mortimer told the Daily Mail.
“It’s been a challenging time for department stores, which have struggled in recent years. It’s early days for Myer, so the next 12 months will be telling.”
Challenges in the Retail Landscape
Dr. Mortimer warned that Myer’s fashion and homewares brands might continue to face difficulties due to ongoing inflation, particularly the rising cost of housing, which is impacting consumer spending. This economic pressure is driving customers toward budget alternatives like Target and Kmart, as well as online platforms.
“Discretionary spending is down because people are more focused on paying their rent or mortgages and getting food on the table,” he explained. “Brands such as Dotti are highly exposed to international fast fashion retail killers such as Shein and Temu.”
He emphasized the need for Myer to offer cost-of-living relief to encourage in-store shopping and to clarify their value proposition across their range of apparel brands.
Signs of Hope and Strategic Moves
Despite the challenges, there are glimmers of hope for Myer. The retailer reported a 22.9% increase in online sales for the financial year. Additionally, group sales for the first seven weeks of the 2025-26 year were up 3.1% compared to the same period last year.
“We are cautiously optimistic about the year ahead, with emerging pockets of improving consumer strength,” Wirth said. “We also expect to see a return on the enhancements and investments we have made to strengthen the group and offset ongoing cost of doing business headwinds.”
Wirth, formerly the chief executive of Qantas Loyalty, is spearheading a new group strategy to cut $30 million in costs and expand the Myer One loyalty program to include the new apparel brands.
“In executing our Myer Group growth strategy, we are moving at pace and gaining early traction, including the launch of Myer One at Apparel Brands in August, the overall Myer One relaunch on track for October, Just Jeans’ new format store rollout, as well as introducing new brand partners and welcoming back brands returning to Myer,” Wirth added.
A Storied History with Modern Challenges
Founded by Sydney Myer in 1900, the first Myer store opened in Bendigo, Victoria. The establishment of its first Melbourne store in 1914 laid the groundwork for what would become Australia’s largest chain of department stores. Today, the Myer Group operates over 750 department and specialty stores across Australia and New Zealand.
In recent years, however, Myer has faced significant challenges, including the closure of flagship outlets in Hornsby, Brisbane CBD, Belconnen in Canberra, and Melbourne’s Knox. The coming months will be crucial in determining whether the storied retailer can adapt and thrive in a rapidly evolving retail landscape.
