Myer is currently characterised by widespread discounting and promotional activity, which has reduced its profitability. The department store reported double-digit sales growth to $4.1bn last financial year, but this was driven by the acquisition of apparel chains Just Jeans, Jay Jays, Portmans, Dotti, and Jacqui E, rather than surging demand.
The company has also reduced the value of its brands by over $200m in one year, acknowledging their decreased worth. Department stores generally have faced a "sustained erosion of relevance over the past five years," according to IBISWorld market researchers, due to online platforms and specialist retailers.
Myer's rival, David Jones, has fallen into administration and is closing half of its 38 stores. Myer, however, ended the last financial year with a $100m net cash buffer, providing it with financial flexibility. Myer has also been reducing its store numbers, down to 56 from 60 before the pandemic.
Analysts have varied opinions on whether Myer's permanent discounting is a viable survival strategy or a path to bankruptcy. Richard Hemming, editor at Under The Radar Report, suggests that high sales volumes can eventually lead to customers paying more. Myer is also focusing on aggressively pursuing online sales.
Myer's shares are trading around 24p, significantly below its 2009 float price of $4.10. The upcoming closure of 19 David Jones stores, with roughly two in five Myer stores sharing a shopping centre with a David Jones outlet, is anticipated by investors to provide Myer with a market-share boost.