The upcoming year is pivotal for the iconic Australian department store Myer, according to a retail expert, in light of declining profits, store closures, and a dramatic fall in share prices.

The 124-year-old company disclosed on Tuesday that its profits had plummeted nearly by a third over the year ending July 26, attributing the decline to weaker consumer demand and challenging economic conditions.

Following this announcement, investors promptly offloaded Myer shares, leading to a 15 per cent drop at the opening, which worsened to a 28.91 per cent decline by midday, with shares trading at $0.46.

The retailer’s net profit after tax decreased to $36.8 million, reflecting a 30 per cent reduction compared to the previous year. Earnings before interest and tax also fell nearly 14 per cent, amounting to $140.3 million.

Myer recorded a significant $211.2 million statutory loss, attributed to its acquisition of five fashion brands from Premier Investments, including Just Jeans, Jay Jays, Jacqui E, Portmans, and Dotti.

Executive chairwoman Olivia Wirth sought to reassure stakeholders, stating that 2024-25 marks a ‘transition year’ as the company integrates its new brands and targets $30 million in cost reductions.

‘FY25 was a transition year for Myer Group as we reset the base to position the business for long-term growth,’ she said.

‘Despite challenging macroeconomic conditions and tough retail markets in Australia and New Zealand, we achieved positive sales growth in our first period as a combined group.’

But retail expert Dr Gary Mortimer warns the clock is ticking for Myer.

 

He said that sales for Myer’s newly acquired brands Just Jeans, Jay Jays, Jacqui E, Portmans and Dotti were either flat or declined during the second half of 2024-25.

‘It’s only year one of the acquisition, so it will be interesting to see how the next 12-24 months play out,’ Dr Mortimer told Daily Mail.

‘It’s been a challenging time for department stores, which have struggled in recent years.

‘It’s early days for Myer, so the next 12 months will be telling.’

Dr Mortimer warned that Myer’s fashion and homewares brands could continue to struggle due to the cost-of-living crisis and the likes of Target and Kmart entering those markets.

‘Discretionary spending is down because people are more focused on paying their rent or mortgages and getting food on the table,’ he said.

‘Brands such as Dotti are highly exposed to international fast fashion retail killers such as Shein and Temu.’

‘If they want people to spend in-store, it will require some cost-of-living relief.

‘Myer also needs a clearer value proposition on their breadth of apparel brands.’

It’s not all not doom and gloom with Myer Retail recording a 22.9 per cent jump in online sales in the last financial year.

The retail giant also revealed that group sales for the first seven weeks of the 2025-26 year are 3.1 per cent up compared to the same period last year. 

‘We are cautiously optimistic about the year ahead, with emerging pockets of improving consumer strength,’ Ms Wirth said.

‘We also expect to see a return on the enhancements and investments we have made to strengthen the group and offset ongoing cost of doing business headwinds.’

The former Qantas loyalty chief executive is also leading a new group strategy to slash $30million in costs and expansion of the retailer’s popular Myer One loyalty scheme to the new apparel brands.

‘In executing our Myer Group growth strategy, we are moving at pace and gaining early traction, including the launch of Myer One at Apparel Brands in August, the overall Myer One relaunch on track for October, Just Jeans’ new format store rollout, as well as introducing new brand partners and welcoming back brands returning to Myer,’ Ms Wirth added.

Myer was founded by Sydney Myer, who opened the first store in Bendigo in country Victoria in 1900.

Its first Melbourne store in 1914 built the foundation of Australia’s largest chain of department stores.

Today, the Myer Group operates a network of more than 750 department and specialty stores across Australia and New Zealand.

In recent years it has shut down  flagship outlets in Hornsby, Brisbane CBD, Belconnen in Canberra, and Melbourne’s Knox.