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Ex-Qantas exec new CEO of retail giant

WEEKEND READ - AUSTRALIAN ECONOMY
Myer store banners in Mehas returned a healthy half-year profit. Picture: NCA NewsWire / Luis Enrique Ascui

Former Qantas executive Olivia Wirth has been appointed the new chief executive of Myer on the same day the department store revealed a staggering net profit of more than $50m.

Previously the chief executive of Qantas Loyalty, Ms Wirth will take on the role of chief executive and executive chair at the retail giant, Myer announced on Thursday.

Following a shake-up of management, Ms Wirth quit Qantas in October last year and joined the 124-year-old retailers board just one month later.

Ms Wirth will begin her duties as chair on Thursday following the resignation of Myer’s current chairman Ari Mervis, and will start as chief executive on June 4 when she will replace John King.

“I am honoured to lead one of Australia’s iconic businesses and brands into a new and exciting phase,” she said on Thursday.

Former Qantas executive Olivia Wirth appointed as Myer's CEO. Picture: Eugene Hyland
Former Qantas executive Olivia Wirth appointed as Myer's CEO. Picture: Eugene Hyland

“Myer is loved by millions of Australians and is one of the nation’s most enduring retailers thanks to the dedication and skill of our team members, and the loyalty of our customers.

“My immediate priorities will be ensuring we are delivering a great in-store experience with a world-class range and best-in-class customer service, while investing in e-commerce and harnessing loyalty and partnerships among our customers and suppliers.

“I want to thank both Ari and John for their service to Myer and support.”

Mr Mervis said Ms Wirth’s appointment would begin a “new era” for the storied company.

“Olivia is an experienced and respected leader with a track record of delivering improved business performance,” he said.

“She transformed Qantas Loyalty into one of Australia’s most successful customer engagement and omni-retail businesses.

“Since joining the board last year, Olivia has demonstrated impressive commercial acumen and an acute understanding of the dynamics facing both Myer and the broader retail sector.”

The announcement comes as the retail brand recorded an impressive half-year profit despite months of interest rate rises hitting household budgets and fresh warnings of slowing consumer spending.

Myer recorded a net profit after tax of $52m for the half-year ending December 31, 2023, a 20 per cent decline on the $65m it booked in the prior corresponding period.

CHRISTMAS SHOPPING
Online sales growth is rising at Myer according to its half-year results up to December 31, 2023. Picture: NCA NewsWire / Luis Enrique Ascui

It booked $1.82bn in sales, a 3 per cent decline year-on-year.

Group comparable sales growth at the company, or sales from the company’s existing stores, also held steady from the record sales it recorded in the prior period, marking a 0.1 per cent increase.

Mr King said the company’s “customer first plan” had delivered for the business “despite the macro economic conditions”.

“We were able to achieve a strong comparable sales outcome, cycling our best ever first-half sales on record in FY2023 and saw improvements in our market share across both stores and online,” he said on Wednesday.

“Our underlying profit result has remained robust despite the impacts from our Brisbane store closure and increased promotional cadence.”

The company announced it would return some $25m to investors, with an interim dividend of 3c per share.

Online sales growth rose two per cent to hit $390.1m or 21.3 per cent of total sales.

Despite the profit fall, investors cheered the results when the market opened on Thursday morning, noting they come in challenging conditions for retailers after 13 rate hikes hit consumers from May 2022 through to November 2023.

CHRISTMAS SHOPPING
Myer has recorded an impressive half-year profit despite months of interest rate rises hitting household budgets and fresh warnings of slowing consumer spending. Picture: NCA NewsWire / Flavio Brancaleone

The company’s share price popped more than five per cent at the opening bell.

eToro market analyst Josh Gilbert said the results showed the company was “weathering the storm”.

“Their numbers certainly aren’t setting the world alight, but they offered some positivity on sales for the first six weeks of the second half of the year,” he said on Thursday morning.

“That’s good news, especially given the slowdown in retail sales we’re witnessing.

“All in all, it’s a pretty decent result.”

Mr King said comparable sales were up 4.9 per cent for the first six weeks of 2024.

“Like all retailers, we continue to remain cautious about the macro-economic environment; however, we are encouraged with our results for the first six weeks of 2H and have a strong program of deliverables to roll out during the first half as part of our ‘customer first plan’,” he said.

The company’s share price has boomed nearly 40 per cent year-to-date, including a sharp 14.3 per cent jump on February 6 after Myer released guidance on its expected results for the half-year and said it expected profits to land somewhere between $49m and $53m.