Myer has just released its annual results with total sales down 2.9% on the year before.
👉 Background: Myer is the Australian department founded in 1900. It was once the epitome of luxury fashion in Australia but, it's been struggling for the past 10 years. In fact, Myer's valuation has dropped from its peak of $2.2 billion in 2009 to just $724 million.
👉 What happened: Myer has just released its annual results with total sales down 2.9% on the year before. What's more? Myer's net profit was also down 26% on last financial year - mainly because of the underperformance of Myer's own brands like sass&bide, Marcs, and David Lawrence.
👉 What else: But rather than closing down these brands, Myer has chosen to work on them. The goal is to use these brands to improve its thin margins.
💡To build a healthy brand, you need healthy margins.
💡 While Myer generated over $3.2 billion in sales, its EBIT was only $162 million, which is an EBIT margin of 4.9%. But for Myer to re-establish itself as a powerhouse of retail, it needs to shift away from such thin margins.
💡That's why Myer is keen to invest in its slower brands like sass & bide. It's also why earlier this year, Myer announced plans to acquire Jay Jays, Dotti, Portmans and Just Jeans from Premier Investments.
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