Struggling department store Myer has swung to a $172 million loss for the past financial year after the retailer was forced to write down the value of its brand names after being battered by the COVID-19 crisis.
Myer told investors on Thursday its statutory net loss after tax for the year ending July 25 was $172.4 million, a 800 per cent decline on the net profit of $24.5 million in posted in 2019.
Myer has posted a $172 million loss for the last financial year.Credit:Eamon Gallagher
This loss was primarily driven by $159 million in significant items, including a $95.9 million write-down to the value of the company's brand names and a $37 million impairment to the value of the company's leases.
Excluding these significant items, Myer reported a net loss after tax of $11.3 million. Revenue for the retailer also fell, down 15.8 per cent to $2.52 billion.
Online sales were a bright spot for the retailer, coming in at $422.5 million for the full year and comprising 17 per cent of total sales. This marks a 61.1 per cent increase on the prior year.
Myer, like many retailers, has had a difficult year due to COVID-19, with the chain forced to shut its stores in late March due to government-enforced lockdown laws. Eleven Victorian stores were then shut again in August thanks to the state's stage four restrictions.
Chief executive John King said the pandemic had significantly affected Myer due to many of its highest-performing stores being located in CBD areas, where foot traffic has been significantly muted.
"For the majority of the second half, there was substantially reduced traffic to physical stores, particularly to those located in CBD locations," he said.
"Myer’s CBD stores represent some of its largest stores with high associated rents, and staffing requirements and therefore the impact on profit as a result of the reduced revenues was exaggerated."
The department store received $93 million in JobKeeper subsidies for its 10,000 staff which were stood down during store closures. A total of $41 million of that was paid to staff whose remuneration was lower than the required threshold.
Chief executive John King said the pandemic had significantly affected Myer due to many of its highest-performing stores being located in CBD areas, where foot traffic has been significantly muted.Credit:Getty Images
This significant stimulus, along with other relief such as rent deferrals, helped Myer bolster its cash position. The retailer reported net cash of $7.9 million, compared with $38.7 million in debt last year.
Mr King hinted the company may accelerate its plan to close some of its 60 stores across the country, saying it would look to "rationalise property" in light of the pandemic.
Myer did not pay a dividend.
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