Myer CEO defends Topshop strategy

Myer boss Richard Umbers remains committed to his “wanted brands” strategy despite the retailer suffering a $46 million hit from the collapse of its Topshop experiment and continuing pain from fashion label sass & bide.


Less than two years after announcing Topshop as part of the ‘New Myer’ five-year turnaround strategy, Myer has closed all 17 of its concession stores and will write down its $6.8 million stake in the brand.

Myer bought a 20 per cent stake in Austradia, the Australian franchisee for the Topshop Topman, to ensure it was the only department store chain to have the label.

Myer on Thursday announced it will take a total $45.6 million hit comprising a $6.8 million writedown on Topshop and a $38.8 million impairment of the value of its struggling sass & bide brand.

“Topshop was a key brand and one of the first ones we took on,” Mr Umbers told AAP on Thursday.

“It is now part of a natural cycle of renewal, which in this particular case was prompted by the unfortunate circumstances of Australia.”

Myer had previously flagged full-year net profit above 2016’s $60.5 million.

However writedowns and another $20 million in costs are now likely to eat up a significant portion of the $66 million to $70 million underlying full-year net profit it now forecasts.

Mr Umbers said fierce price cuts across the apparel sector, weak consumer spending due to low wages growth and heavily indebted households have created tough trading conditions.

“And there’s some anticipation of more tough times ahead with interest rates possibly going up and housing prices not increasing the way they have in the past; all of that contributes to reduced spend,” he said.

Despite Topshop’s collapse and the resignation of deputy CEO Daniel Bracken, who was one of New Myer’s architects, Mr Umbers said Myer will stick to its turnaround plan, including chasing wanted brands and continuing sass & bide.

Topshop did deliver benefits in that it opened Myer up to a raft of new brands, including most recently Forever New, he said.

Shares in the retailer closed at an all-time low of 73.5 cents – down 9.8 per cent for the day and far from Myer’s 2009 issue price of $4.10.

Almost $600 million has been wiped from Myer’s market value since August last year in a decline which could see it become a takeover target.

Solomon Lew’s retail group Premier Investments bought a 10.8 per cent stake in Myer in March and released a statement calling it “a strategic investment,” which fuelled speculation that the retail magnate was gearing up for a takeover.

Comment has been sought from Mr Lew, a former chairman of Coles Myer, who is now chairman Premier, which owns Smiggle stationery stores, Peter Alexander pyjama stores and the Just Group.

Citi retail analyst Craig Woolford said department stores generate about 17 per cent of their revenue in the June-July sales period and blamed Myer’s shift away from discounting for hurting its second-half earnings.

Pietersen slams England top order after South Africa rout

Opener Keaton Jennings has totalled 44 runs in his four innings in the first two tests of the four-match series, which is tied at 1-1, while number three Gary Ballance has failed to score a fifty in his last 11 innings.


England cruised to a comprehensive 211-run win in the series opener at Lord’s but new captain Joe Root was given a rude awakening in the second test when South Africa won by a massive 340 runs at Nottingham to square the series.

“They picked a poor test-match team,” Pietersen told Sky Sports after scoring 52 off 35 balls in his return to domestic cricket for Surrey in the NatWest T20 Blast on Wednesday. “I know they won at Lord’s but that was the brilliance of Joe Root.

“There’s individuals that are brilliant, but the collective don’t fire as much as they should and there are some holes in that batting order.”

Root, who replaced Alastair Cook as England’s test captain, scored a splendid 190 to set up England’s win.

While Cook has looked solid during the series, the left-handed opening batsman has in the past been criticised for his defensive approach.

“You cannot have a top three that bat as the top three bat or has poor technique, you cannot have that,” said the 37-year-old Pietersen, who played 104 tests for England.

“You’ve got to change that up, get them striking, get bowlers thinking ‘Goodness, if I don’t bowl this ball in the right place, I’m going to get whacked’. Malan and Roy are my choice.”

England will have to make at least one change to their batting line-up for next week’s third test at The Oval as Balance has been ruled out with a broken finger.

Roy has been a regular member of England’s limited-overs squads but was not selected for the 50-over Champions Trophy at home last month.

Malan improved his chances on his England debut last month in the deciding Twenty20 international against South Africa in Cardiff, where he starred with a series-winning 78 off 44 balls.

(Writing by Sudipto Ganguly in Mumbai; Editing by John O’Brien)

Big four banks lead market higher

Another day of strong gains by the major banks, and a rally by energy stocks, has pushed the share market higher.


The benchmark S&P/ASX200 index rose 0.5 per cent to 5,761.5 points, as the financial sector closed 2.4 per cent higher.

The Australian dollar briefly hit 79.89 US cents after the latest employment numbers showed another rise in full-time employment, but it fell back in afternoon trade to be worth 79.24 US cents at 1700 AEST.

Citi Global Markets director of equities sales Karen Jorritsma said the big banks were again the focus, following the banking regulator’s Wednesday announcement of milder-than-expected capital requirement increases.

“ANZ has done twice the normal daily volume,” Ms Jorritsma said.

“Nnow that nervousness around the capital raising is resolved, the big banks are back in business.”

ANZ gained 2.9 per cent, Westpac added 2.4 per cent, National Australia Bank rose 1.6 per cent and Commonwealth Bank was 0.9 per cent higher.

“Investors were particularly bullish about ANZ which has sufficient capital due to the sales of some of its wealth management assets, while CBA, from a valuation standpoint, is least appealing with the slight possibility they may do a capital raising,” Ms Jorritsma said.

The major energy stocks all rose on higher overnight oil prices, while Santos upgraded its full year sales and production forecasts, leading to a gain of 8.3 per cent.

Oil Search was up 1.8 per cent, Woodside Petroleum gained 0.7 per cent and Origin gained 0.3 per cent.

Myer had a day to forget, losing 9.8 per cent to 73.5 cents, following an earnings downgrade and announcement of a $45.6 million hit from its investment in Topshop’s Australian franchisee and fashion label sass & bide.

“I don’t see how Myer can redeem itself, without providing any detail to quell the market,” Ms Jorritsma said.

Infant formula maker Bellamy’s Australia dropped five per cent to $6.40 as its shares resumed trading after two-week hiatus, following its offer of refunds for the capital raising on a canning facility that failed to gain Chinese regulatory licensing.


* The benchmark S&P/ASX200 was up 29.4 points, or 0.51 per cent, at 5,761.5 points at 1630 AEST

* The broader All Ordinaries index was up 26.3 points, or 0.46 per cent, at 5,805.7 points.

* The September SPI200 futures contract was up 38 points, or 0.67 per cent, at 5,703 points.

* National turnover was 2.2 billion securities traded worth $6.5 billion.



AUD/USD 0.7925 0.7923 0.7949

AUD/JPY 88.88 88.8 88.99

AUD/EUR 0.688 0.6875 0.6902

AUD/NZD 1.0798 1.0784 1.0802

AUD/GBP 0.6088 0.6082 0.6106


The spot price of gold in Sydney at 1700 AEST was $US1,2389.33 per fine ounce, down from $US1,239.84 per fine ounce on Wednesday.


* CGS 4.50 per cent April 2020, 1.9733pct, from 1.965pct on Wednesday

* CGS 4.75pct April 2027, 2.685pct, from 2.6727pct

Sydney Futures Exchange prices:

* September 2017 10-year bond futures contract at 97.26 (implying a yield of 2.74pct) from 97.27 (implying a yield of 2.73pct) on Wednesday

* September 2017 3-year bond futures contract at 97.93 (2.07pct) from 97.94 (2.06pct).

(*Bond market closes taken at 1630 AEST previous local session)

Wilkinson portrait wins Packing Room Prize

Artist Peter Smeeth badgered TV personality Lisa Wilkinson for six months before she found the time to sit for a portrait which has now won the Packing Room Prize at the Archibald exhibition.


“I have such a full-on life and my schedule is a little crazy, so it took a bit of juggling to organise,” Wilkinson told AAP on Thursday after head packer Steve Peters announced his favourite of 2017’s exhibition entries.

Peters is bidding farewell to the Art Gallery of NSW after 35 years as the top packer.

“It’s been absolutely wonderful but it’s now time for me to retire and tell my mates some home truths about their golf game – like I told some artists some home truths about their artworks,” he said at the gallery.

Wilkinson, who was nursing a broken arm at Thursday’s event, did three separate sittings to allow Smeeth to accurately capture her in a “relaxed” position.

“At one point during the sitting I fell asleep, so I’m thrilled Pete didn’t capture me asleep because that kind of captures me at two o’clock in the afternoon,” she said.

Smeeth has entered the Archibald Prize 34 times, been a finalist three times and won the Sulman prize in 2011.

The artist wasn’t at the gallery as the Packing Room Prize was announced because he was delivering a eulogy in Yass, in regional NSW, for an old school friend of 57 years.

But in a statement read out by Art Gallery of NSW director Michael Brand, Smeeth described winning the packing prize as “the kiss of death”.

“No winner of this prize has gone on to win the Archibald and this – along with the fact that no reclining figure has ever won – is an early tip for punters; put your money on others in the field.”

Finalists for the 96th Archibald – the longest-running art prize in Australia – include a portrait of Aboriginal actor Jack Charles by Anh Do and a painting of the outgoing packer Peters by Lucy Culliton.

Full-time jobs boost lifts recovery hopes

Continuing strength in full-time employment has strengthened hopes of a turnaround in Australia’s jobs market.


The unemployment rate was 5.6 per cent in June, unchanged from a revised May figure, the Australian Bureau of Statistics said on Thursday.

The total number of people with jobs rose by 14,000 in the June, with full-time employment up by 62,000 and part-time jobs down by 48,000.

CommSec chief economist Craig James said 115,400 full-time jobs were created in May and June combined, the biggest back-to-back gain in 29 years.

The Australian dollar spiked on the news, hitting 79.89 US cents, before easing throughout the afternoon to trade at 79.25 US cents by 1700 AEST.

UBS economists said the data showed employment remains strong and supports the Reserve Bank’s positive outlook.

“But, the onus is on jobs and wages to lift to avoid slower consumption,” a UBS research note said.

RBC analyst Michael Turner said the Reserve Bank had already noted diminishing downside risks to its labour market outlook.

“Today’s data will likely add to that confidence and points to a more upbeat set of communication in coming days,” he said.

Mr Turner said improvements in full-time jobs numbers and the number of hours worked – up 0.5 per cent for the month – contributed to “clear and growing signs that some of the spare capacity available within the pool of employed workers is being eroded”.

ThinkMarkets senior market analyst Matt Simpson said the job numbers were largely in line with economists’ expectations.

“As part-time employment weighed heavily on total jobs and full-time employment increased, markets took it as a healthy employment set,” he said.