Myer – A Case Study In Who Shouldn't Invest Or Lead Retailers.

Since Myer floated in 2009 at a price of $4.10 per share, the retailer has seen it’s market capitalisation dip from $2.2 billion dollars to $429 million or 59 cents per share. Many people argue that TPG Capital were the only investors to have profited from Myer in over twenty years. Two years ago the Myer Board agreed to back a five-year turnaround strategy that would punt a capital investment greater equal to its market capitalisation. Less than two years into the five-year turnaround, investors, analysts and media starting agitating for change based on a perceived lack of results and a loss of confidence in the vision that had been backed by the board.

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The Future Is Local.

“It seems like I’ve been here before, I can’t remember when, But I got this funny feelin’ that I’ll be back once again” wrote Harry Chapin in his 1972 classic song “All My Life’s A Circle”. He could have been talking about retail and how – no matter how hard vested interests force us away from economic gravity; eventually the immutable laws bring the pendulum back to economically sustainable.

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Recruiting The Next Generation Of Shoppers.

Once upon a time children used to accompany their parents (mostly their mums) shopping and learned an appreciation of it. That was before we became a society dominated by households with two working parents. Once upon a time the weekly grocery shop used to be a family affair. That was before we began moving increasingly towards buy to consume. Once upon a time there used to be plenty of jobs in retail for youth. That was before retail decided labour was a cost centre not a profit centre. Once upon a time we used to have stores that actively sought to recruit the next generation of shoppers by creating customer experiences that delighted them with the joys of shopping.

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Appropriate Protection Could Save Your Retail Life.

Retail is in the middle of the perfect storm. Technology, global sourcing and global brands have all conspired to drive prices and margins down for an extended period of time. There looks to be no respite from these forces as they persist in denigrating retail to an undifferentiated, lowest common denominator. Left alone, this trend will continue to consolidate dominance in a small number of surviving power players amidst a sea of economic destruction.

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Data Can’t Save Our Department Stores.

The world of retail is constantly bombarded with claims that data is what drives success. So explain to me how Myer – that between Flybuys and the MyerOne card database – sits on one of the world’s richest sources of big data, fails to compete with retailers that have – in some instances – none. David Jones is much the same. Hundreds of millions of dollars of shareholders funds spent over the last three decades on data collection, warehousing and reporting have produced nothing but declining sales and shrinking margins.

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A Free Ride From The Economy To Lift Your Profit Isn’t On The Horizon.

According to a recently released study by the World Bank the global economy grew by an estimated 3 per cent last year and projections are for continued growth to be no more than that level for the next decade. “Growth in potential output (full-employment output) is flagging, languishing below its longer-term and pre-crisis (GFC) average both globally and among emerging market and developing economies,” the report said. This tallies with the average growth rate of the Australian economy post 2009.

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