What Can We All Learn from Myer?

When Myer floated on the ASX back in 2009, the shares were valued at $4.10. It was judged at the time to be a very successful float. For TPG and Blum Capital (the private equity owners prior to the float) that is. Its current share price is around 90 cents and market capitalisation around $835 million. About a third of what it was floated for. Its sales have stagnated, its costs have risen and profit has gone ‘down, down’ to steal a phrase from its former stable-mate Coles.

Lesson number one in ‘new Myer’ is about realistic expectation setting and logical analysis of value. Neither of these was in evidence at the time of the float.

Since that time ‘new Myer’ has brought to the market a series of presentations ‘selling’ what it would do to right the ship, improve profit and increase shareholder value. None of these presentations led to successful executional outcomes.

Lesson number two in ‘new Myer’ is about actions speaking larger than words.

In recent weeks we have the seen a new presentation launching ‘new, New Myer’. The strategy and the thinking behind the latest presentation have been seemingly universally accepted as sound. And while some argue the target numbers are ambitious, lesson number two is the lesson that the market is acting on.

‘new, New Myer’ is banking on a capital expenditure program in excess of $600 million dollars to enable the shift to the re-shaped enterprise – not a long way short of its current market capitalisation.

Success is entirely dependent on implementation. An implementation that the Myer leadership team believes it can achieve within a five-year timeframe. This is not without precedence as the renaissance of both Selfridges and Bergdorf Goodman were both achieved within a five-year period.

For all retailers the lessons from Myer apply.

Increasingly ‘hype’ is a short-term strategy with negative longer-term outcomes that can often be catastrophic. Getting caught up in salesmanship of a story without backing it up with implementation can be even worse. Consumers vote with their wallets. Every day. It’s the thousand ways you touch the customer every day that leads to profit gain and that is all down to implementation creating customer value improvement which is sustainable.

Cut the hype. Build a realistic vision. Turn it into a plan you are sure you can implement in your business. Make sure you deliver. For all stakeholders.

In modern retail actions speak louder than words and profit is the only true measure of success.