Myer is lowering the bar for success of its turnaround plan after failing to meet growth targets it set two years ago but the embattled retailer insists its strategy is sound.
Retail veteran Solomon Lew, Myer's largest shareholder, ramped up his campaign of criticism of the company and its leadership on Wednesday as it unveiled a drop in sales for the first quarter of 2017/18.
"I only see weeds, no green shoots," Mr Lew said, in a reference to recent comments comments from incoming Myer chairman Garry Hounsell that the revival plan was showing "green shoots".
The $600 million "New Myer" turnaround plan is based on store closures, reducing floor space, focusing on concession stores of "wanted" brands and targeting young trendy shoppers.
Myer chief executive Richard Umbers told investors at a strategy day on Wednesday that traditional retail was "challenged".
"We believe New Myer is the logical response and the only viable course of action we can undertake," he said.
Mr Umbers unveiled a 2.8 per cent fall in first quarter sales to $699 million, after giving in to sustained pressure from Mr Lew for a market update well before the AGM later this month.
Mr Lew controls a near-11 per cent stake via his Premier Investments retail house, which owns Smiggle, Dotti and Peter Alexander.
Myer's first quarter slump showed the sales decline of last financial year has continued and was markedly weak compared to the slight 0.6 per cent rise in sales in the same period a year ago.
In a statement, Premier Investments criticised Myer's move to lower performance hurdles attached to New Myer but stick with the plan "despite the very clear evidence that it has failed".
Mr Umbers blamed stiff competition, weak consumer spending and a fall in foot traffic at malls for the poor performance and for scrapping the group's sales growth target set in 2015.
"Two years ago when we released the New Myer strategy we did not anticipate the extent of deterioration in market conditions," Mr Umbers said.
"Our ambition of three per cent sales growth seemed appropriate at the time but it doesn't seem appropriate now."
Myer will now measure performance against sales per square metre growth, although it has roughly halved the target, while a previous target for growth in earnings to outpace that of sales has also been scrapped.
Myer has also committed to keep its recently launched clearance floors, saying the option delivers a share of the $4.6 billion "off-price" retail market where big brands are sold at heavy discounts, like at DFO and US retailer TK Maxx.
Mr Lew has slammed the floors as featuring old stock that belonged in a Salvation Army store.
CMC Market analyst Ric Spooner said Myer's first quarter showed it was improving its efficiency in sales per square metre terms but the slide in the more important measure of comparable sales slide was disappointing.
Shares in Myer closed 3.5 cents, or 4.6 per cent, lower at 73 cents.
