Australian department store owner Myer on Wednesday posted lower interim earnings, citing logistical challenges at a distribution centre in Victoria and strategic review costs, while painting a gloomy outlook due to weak economic conditions.
Myer
The firm, which finalised the purchase of the apparel brands portfolio from rival Premier Investments, opens new tab in January, said the sales for the first five weeks in the second half of the fiscal year were already down by 2.6%.
Shares in Sydney dropped 10.5% to A$0.68 and hit their lowest since June 24, 2024.
Total sales at the retailer were A$1.83 billion ($1.16 billion), with comparable sales up just a touch below 1%. This reflects the closure of Brisbane and Werribee stores coupled with other closures. The retailer posted net profit after tax of A$42.4 million for the 26 weeks ended January 25, an 18.5% decrease from the previous year.
“Distribution centre issues certainly didn’t help matters either, but for Myer’s profit to start looking healthier next time around the company will be hoping for brighter retail conditions to emerge,” said Tim Waterer, an analyst at KCM Trade.
The results come after Myer’s January warnings of sluggish sales and earnings during the major festive periods of Black Friday, Christmas and Boxing Day.
A measure of Australian business activity dropped to its lowest since the pandemic last November due to tough trading conditions in both manufacturing and retail sectors, suggesting the local economy had not picked up from a time when households struggled with rising costs of living. Myer had updated the market regarding the construction of a national distribution centre in Victoria during 2021, which went live in August 2024.
“The site has experienced implementation issues and is not yet operating as designed,” the firm flagged.
“If I was a shareholder, I’d be demanding more clarity as to what constitutes ‘operational issues’ given (if the matter is warehousing, technology, system or infrastructure),” said Jesse Moors, portfolio manager at Spatium Capital.
Represent’s move into womenswear is continuing and the UK-based labels next step on the journey sees it expanding the offer in the shape of the first women’s iteration of the brand’s signature ‘Initial’ line.
London-based model and DJ Kim Turnbull is fronting the campaign.
First introduced in 2023, the Initial collection relaunched last year to “create a premium line of staples with minimalist branding, designed to elevate everyday outfits”.
Drop One of the women’s version features key essentials including sweatshirts, hoodies, joggers and shorts in the brand’s “classic relaxed oversized fits” and in a brushed heavyweight fleece cotton.
The offer also includes staples in fitted silhouettes and ribbed cotton such as the Baby Rib Maxi Dress and Initial Baby Tee, as well as the brand’s popular cargo joggers.
The 16-piece collection features the Initial ‘R’ embroidery throughout and is available in Storm Grey and Washed Black colourways with a fade out dye technique “to give each garment a unique finish, inspired by weathered concrete after rainfall”.
With prices range £65-£160, the collection launched globally at representclo.com and in Represent Manchester and LA stores.
Truworths UK Holdco Ltd — best known as the owner of the Office and Offspring footwear businesses — has filed its accounts for the year to the end of last June and they show profits more than doubling.
@officeshoes
The company, which has been owned for a decade by South Africa-based Truworths, said pre-tax profit jumped to £102 million from £47.7 million, a strong bounce-back after it was loss-making in the years to June 2019 and 2020.
Revenue at the company also jumped from £265.3 million to £294.3 million. the company’s net profit also surged, rising from £37.7 million to £79.8 million.
The strong year came as the business opened new stores and as of the year-end, it operated 75 stores (up from 70), plus 11 concessions spread across the UK and the Republic of Ireland. Job numbers also rose to over 1,800 from just over 1,600.
The year in question was a tough one for the UK fashion industry but in the accounts the company said that trading conditions were much improved in the period. And while consumer confidence remains shaky, it added that it has improved steadily.
That said, consumer spending was (and is) under pressure. But the company said “the branded fashion footwear sold by Office proved to be a resilient category and traded well throughout the period,” helped by the new and revamped stores.
The business remains upbeat for its future prospects, and said it “will continue to leverage its strong relationships with the world’s leading footwear brands, its loyal customer base across the Office and Offspring brands and ongoing investment in digital marketing. Growth in the year ahead will be driven by a strong online presence and the expansion of the Office store portfolio through new store openings and the remodelling and extension of existing stores in strategic retail locations”.
UK retail mega-landlord Shaftesbury Capital responded to speculation about its intentions in London’s Covent Garden late Wednesday confirming that it was in talks on a link-up with a major investor, but that it might not happen. Then on Thursday it said the deal was done!
The property giant, which also owns vast tracts of London’s wider West End, said it has formed a strategic, long-term partnership with Norges Bank Investment Management (NBIM), the Norwegian sovereign wealth fund, in respect of its Covent Garden estate.
Shaftesbury Capital has exchanged contracts for the sale of a 25% non-controlling interest in the Covent Garden estate to NBIM. The Transaction values the Covent Garden estate at £2.7 billion, in line with its independent property valuation as at 31 December 2024, with expected gross cash proceeds of approximately £570 million.
Completion of the Transaction is expected to take place in early April.
The company said Covent Garden “is a world-class global destination in the heart of the West End of London, centred around the iconic Piazza, the Market Building and surrounding streets, together with Seven Dials. It is a mixed-use portfolio of assets, with 74% of the property value represented by retail and food & beverage and 26% by office and residential. The estate is a vibrant, high-footfall destination, which provides a seven-days-a-week trading environment and exposure to a diverse customer base which has proven to be resilient throughout economic cycles”.
The portfolio has a net initial yield of 3.6%, annualised gross income of £104 million and an estimated rental value (ERV) of £134 million. It covers 220 buildings and over 850 units, across 1.4 million square feet (excluding 0.1 million square feet of long-leasehold residential interests).
The board said its thinking in doing the deal is that it “will provide a number of strategic and financial benefits”. These will include “creation of a strategic partnership with a leading global investor with a long-term investment horizon and knowledge of and established presence in London’s West End”.
It also “positions the business for enhanced investment and expansion opportunities both within the partnership and the broader group, adding to its growth prospects”.
The deal will also strengthen its balance sheet and offer enhanced financial flexibility across the group, “with a range of options to deploy the proceeds, including acquisitions, investment into the existing Shaftesbury Capital portfolio and reduction of net debt”.
CEO Ian Hawksworth said: “This investment by a leading global real estate investor demonstrates the quality of our portfolio. This partnership brings together two long-term investors who have a shared confidence in and ambitions for the growth prospects of the Covent Garden estate and the West End.
“Through partnering with private capital, this transaction leverages our operating expertise and assets, enhancing growth and expansion opportunities across our portfolio whilst strengthening our financial position and providing significant optionality to the Group.
“As demonstrated by our recent 2024 results, Shaftesbury Capital’s portfolio is anticipated to deliver long-term sustained income and value growth. Backed by a strong balance sheet, we are well-positioned to capitalise on market opportunities in London’s West End.”
It’s a major development for the London stock exchange-listed business that has a market value based on its share price of £2.41 billion, lower than the value of one chunk of its property holdings.
The company was formed exactly two years ago as West End landlord Shaftesbury and Covent Garden landlord Capco merged.
Entertainment8 years ago