Myer is monitoring the performance of Sass & Bide after a fall in sales for the luxury women's fashion label played a big part in its third quarter sales slump.
The department store chain's total sales fell 3.3 per cent to $653 million in the three months to April 29, and comparable store sales were down two per cent.
Sass & Bide, bought by Myer in 2011, accounted for $1.5 million of Myer's sales shortfall in the quarter, as sluggish sales in the first half of the financial year continued.
Myer's shift away from heavy discounting, the closure of three stores in the past nine months, severe wet weather from Cyclone Debbie and weak consumer spending also weighed on the company's third quarter sales.
Chief executive Richard Umbers says Sass & Bide operates in the top end of the premium range, where trading conditions are particularly tough.
However, he said Sass & Bide has an important place in Myer's range.
"We've been making a number of changes to the business that gives us confidence that as the conditions improve, Sass & Bide will be in a position to benefit from that," Mr Umbers said.
"We are monitoring it closely as it goes through the changes management is putting in place."
In the past two years, Myer has culled a number of brands and reduced its private labels to make room for what it deems as "wanted" brands, including bringing in Topshop Topman and Mimco as part of a five-year $600 million transformation plan.
Mr Umbers said it should be noted that Myer has delivered total and comparable store sales growth in five out of the past seven quarters.
He said Myer is still on track to achieve full year earnings growth in excess of sales growth, provided weak trade experienced in the January stocktake period does not continue.
Myer is focused on reducing its dependence on discounting even though this has impacted on sales, he added.
The company's sales were flat In the first half of the fiscal year, after the January stocktake sale period offset an improved performance during the Spring racing carnival and Christmas.
The company has recently closed stores in Brookside in Brisbane and in Orange and Wollongong in NSW.
Shares in Myer were down 2.75 cents, or 2.7 per cent, at 98.75 cents at 1505 AEST.
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