Myer to shut down Blacktown store

Myer (ASX: MYR) has announced its fifth store closure in three years with Blacktown, NSW the latest casualty in the recalibrated group's downsizing mission.

The company plans to cease trading at Myer Blacktown on Sunday, 3 April this year, and has committed to "supporting all impacted team members through a period of consultation" with plans to redeploy as many as possible.

The decision stems from the department store operator's 'customer first strategy' to rationalise its network, leading to the closure of Logan (QLD) in 2019, Hornsby (NSW) and Emporium (VIC) in 2020, and Knox (VIC) in August last year.

The Knox site is currently undergoing a transformation as part of a $355 million redevelopment from Westfield operator Scentre Group (ASX: SCG) and State Super to convert the former Myer store into a multi-store location with new retailers, a Woolworths, Aldi and fresh food market.

Today's decision took into account Myer's strengthening online sales in addition to the close proximity of several other Myer stores including Castle Hill, Parramatta, Bankstown and Roselands.

Space reductions and improvements have also taken place at Belconnen (ACT), Cairns (QLD), Morley (WA) and Highpoint (VIC), with space reduction works underway at the Myer Toowoomba (QLD) store.

"Today’s decision continues to deliver against our Customer First Plan and we will continue to make targeted improvements to our store network, reducing space and improving the offer for our loyal customers," says Myer CEO John King.

"We thank our Blacktown team members for their service and contribution to the business and our Blacktown customers for their loyalty to the store – and we trust they will continue to shop with us at our nearby stores or online."

The strategy has been the centrepiece of King's strategy to turn Myer's fortunes around since he was appointed CEO and managing director in mid-2018, although he has been met with antagonism from key shareholder Solomon Lew who is invested in Myer through Premier Investments (ASX: PMV). 

Late last month, Premier upped its shareholding in Myer from 15.77 per cent to 19.88 per cent.

Lew's trades took place shortly after Myer released a trading update on 25 January, highlighting sales for the five months to the start of the year were up 12.3 per cent year-on-year, even though more than a quarter of bricks-and-mortar department store trading days had been lost due to COVID-enforced closures.

This is largely due to a 54.3 per cent surge in group online sales, which now represent around 27 per cent of total revenue.

"The results demonstrate the continued momentum of our Customer First Plan and the resilience of the business to overcome the initial months of lockdowns and still record significant sales growth during this period," King said at the time.

“Whilst we are seeing Omicron impact sales post-Christmas, we will continue to focus on growing our strong online business, ongoing engagement across our MYER one program and disciplined management of costs and inventory.”

In FY21 Myer reported a bottom-line profit of $46.4 million, turning around a $172.4 million loss from the previous year.