Myer focuses on service as profit falls

13 Sep 2012, 4:58 pm   -   Source: AAP
Department store chain Myer suffered a 12.7 per cent fall in full year net profit to $139.4 million. (AAP)

Department store chain Myer suffered a 12.7 per cent fall in full year net profit to $139.4 million. (AAP)

Myer is focusing on customer service and its website to battle challenging retail conditions and low consumer sentiment.

Struggling department store chain Myer's efforts to improve customer service appear to be paying off.

Chief executive Bernie Brooks says the retailer has enjoyed a slight uptick in sales in recent months as it worked hard to get more shoppers through its doors and entice them to spend more.

He said a key part of the strategic plan introduced to help turn around Myer's flagging profits had been to provide longer shopping hours, better training for staff and better merchandise for shoppers.

The company made the move after being forced to admit that cuts to staff levels in recent years had affected sales.

Mr Brookes said the changes had resulted in more shoppers coming into Myer stores and purchasing more products.

"It's a process that will never end as we step up and compete on a customer service perspective," he said on Thursday.

His comments came as Myer unveiled a 12.7 per cent fall in net profit to $139.4 million for the year to July 28.

Sales also fell but only by 1.3 per cent to $3.1 billion, compared to 2010/2011.

Myer said its earnings outlook was uncertain given the tough retailing environment and subdued consumer confidence.

As a result, it did not provide any sales or profit guidance for 2012/2013.

Mr Brookes said the result was solid considering the tough trading conditions and the retailer had ended the year with fourth quarter comparable sales growth of 0.3 per cent.

Comparable sales growth had also continued in the first few weeks of 2013.

"It certainly has been a story of two half years, with the second half improving on the first half," he said.

While online sales were currently less than one per cent, Mr Brookes said Myer was committed to improving its website.

"We're targeting 10 per cent (of total sales) over the next five years," he said.

Analysts had expected Myer to report a drop in annual profit of as much as 15 per cent for 2011/12.

Deutsche Bank retail analyst said Michael Simotas while Myer's full year results were in line with expectations the improvement in comparable sales in the fourth quarter and in the first few weeks of 2013 was promising.

"The cost pressures remain but the fact that comparable store sales grew in the fourth quarter was somewhat pleasing, as was confirmation that that has continued into the first quarter of 2013," he said.

"The other interesting point is that price harmonisation is progressing without a dramatic impact on price deflation."

Mr Simotas said Myer was doing the right thing in investing in customer service and its website but was concerned about the costs associated with its online strategy.

Shares in Myer closed two cents, or 1.08 per cent, lower at $1.82.

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