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MYER CEO Richard Umbers has taken a pay cut of just under $500,000 after the department store giant reported a statutory net profit of just $11.9 million, a fall of 80 per cent from the previous year and its worst profit result since it listed in 2009.
Myer (ASX: MYR) confirmed on Thursday it is struggling to turn around sluggish sales amid weak consumer spending and "discount fatigue" and revealed it will close three more stores and scale back operations at other locations.
Umbers' statutory remuneration for 2016-17 was $1.43 million, down from $1.9 million a year ago, as no short-term incentive bonuses were paid. His base salary remained unchanged at $1.18 million and the $1.43 million included STI's from the previous 2015-16 financial year.
Writeoffs and impairments hit the company's bottom line in its 2016-17 report with total sales down by 1.4 per cent to $3.2 billion for the year to 29 July 2017. It reflected earlier warnings from Umbers that "challenging trading conditions" would weigh on Myer's performance.
Analysts had predicted that Myer would produce a weaker performance in its full year results and in July, the company announced it will take a total $45.6 million hit after writing off the value of its 20 per cent stake in Topshop's Australian franchisee and impairing the value of its struggling sass & bide brand.
The company will now shift its focus to further developing its omni-channel business in response to the shift in consumer demand to making purchases online.
Myer says the omni-channel business had delivered a sales increase of 41.1 per cent to $177 million which represents a penetration of 8.2 per cent of total sales for the financial year.
Store closures in Wollongong, Brookside in Brisbane and Orange and space handback at Cairns and Dubbo has helped Myer improve its productivity and it also plans to let go of leases at Colonnades on the outskirts of Adelaide, Belconnen in Canberra and Hornsby in Sydney.
Umbers says the company will also focus on changing the scope of its retail offering to become more attractive to a change in consumer demand.
The company has reported that sales in the first six weeks of FY18 have been below expectations but is "well placed" for the upcoming trading periods of Spring Racing and Christmas. Its forecast NPAT for FY18 is $66 million.
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