Hard work pays off for Brookes
Myer chief executive Bernie Brookes looks to have entered a purple patch just as his board begins to seriously consider succession planning to replace the long-serving, popular CEO, meaning his legacy as a good operator will remain intact and his successor will get a running start in what is still a choppy market.
Unveiling yesterday's profit, Mr Brookes (above) was cautious in describing the more upbeat and bullish trading environment that has emerged over the past six months, but certainly seemed to suggest the worst was over.
He reeled off a list of positive signs that were bolstering the department store's sales trajectory - property prices not declining, sharemarket up, superannuation accounts stronger, low interest rates and good employment figures - that were feeding into a positive consumer psyche.
To be sure, Myer's first-half and second-quarter sales were only up 1.7 per cent and 2.1 per cent respectively, but that needs to be put into context of the past two years when sales dropped through the floor as shoppers turned away from the stores and decided to shove their discretionary cash in the bank.
Myer and Mr Brookes now look like recording four consecutive quarters of comparable store sales growth, the first time Myer will have achieved that feat since 2009-10 when it was run by private equity.
This is what Mr Brookes and his board have been waiting for. During the winter of flat sales Mr Brookes focused on cutting costs and pumping up store margins, including lifting the penetration of Myer-owned brands (now at just under 20 per cent of all sales).
Now come the better times - hopefully. An improving top line will lead to better profits, thanks to the hard work on costs now almost complete.