By Keri Algar
SYDNEY, NSW: Sales were down 3.5 per cent to $1,733 million for the first half of 2011 compared to last year and on a like for like basis sales were down 5.2 per cent. Net profit after tax was down 8.8 per cent to $108.9 million.
Myer CEO Bernie Brookes said that this was a “solid result, in the context of a very challenging and patchy retail environment".
“The conscious and planned decision to exit whitegoods and re-engineer our music business will deliver long-term benefits as a result of optimising returns, but had a negative impact on our electrical business during the half,” said Brookes.
“In addition, price deflation on large screen TVs and electrical entertainment items in general impacted sales proceeds for the half."
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The company’s strengthened balance sheet – the cash position at the end of this first half is at $169 million – is due to improvements on operating gross margins by reductions in shrinkage, improved sourcing and growth in Myer Exclusive Brands, according to a statement on the Australian Securities Exchange.
“Price deflation continued to be significant across the electrical market, particularly in televisions. The portable audio and console category suffered, however this was offset by an improved performance in computers.
“Our strategy has been to be more price-competitive and we have also continued to focus on buying terms, offering more competitive commissions for sales staff and improving product knowledge amongst team members.”
The company said home furniture had performed well in the past six months, in part benefiting from increased space as a result of the whitegoods exit.