The West

Freo store  closure right: Myer
Freo store closure right: Myer

Myer is confident that closing its profitable but declining Fremantle store next year won't hurt business in what is its best performing State.

Data from the department store operator's Myer one loyalty program indicated it could do without Fremantle because a majority of customers shopping there also went to the refurbished Garden City and Perth city stores.

That combined with discouraging forecasts for the return on investing in the redevelopment of 40-year-old outlet clinched a decision for Myer that had been a long time coming.

Chief executive Bernie Brookes said the Fremantle outlet represented less than 0.5 per cent of Myer's $3.1 billion business.

"The store had deteriorated in volume significantly over the past few years and was continuing to deteriorate. The financial metrics did not work out for us," Mr Brookes said, citing the cost of the lease and impact of the development work on business.

"The tourist precinct had been suffering a little bit in Fremantle as well and Myer one data gave us some easy answers."

Myer plans to open a new store in Joondalup in 2015 to capitalise on what the company describes as one of the biggest growth corridors in Australia.

In releasing annual results yesterday, it said resource-rich WA and Queensland were the first and second-best performers.

The retailer poured cold water on the idea that a revival was under way nationally based on a rise in comparable store sales over the past four months from a year earlier.

"There are some good signs but we're not writing it up as a trend yet," Mr Brookes said.

"Our consumer research that we see says that consumers are very sceptical about spending money."

They remained worried about employment, stock market volatility and the costs of power, health and education. "We can't control those things."

As a result, Myer opted not to give sales or profit guidance for its current financial year. Net profit for the year ended July 31 was down 14 per cent to $139.3 million.

Sales were down 1.3 per cent to $3.12 billion.

Mr Brookes said the company could have increased its profit had it not invested a further $17 million in customer service personnel, on top of the previous year's $9 million.

He said while some investors were not happy about the cost of the strategy, there had been a big turnaround in the ratio of customer complaints to compliments.

Myer's online sales doubled in the past year, but still represented less than one per cent of its business. The long-term online target is 10 per cent.

The West Australian

Latest News From The West

Popular videos