Business
How Australia’s Retail Giant Myer Rebuilt After a $486M Collapse
After reporting a massive $486 million loss in 2018, many believed Myer’s future looked uncertain. The Australian department store giant was struggling with oversized stores, weak online sales and declining customer traffic. But instead of collapsing completely, the company launched a major turnaround strategy focused on digital retail, operational efficiency and profitable growth. Under CEO John King, Myer reduced costs, improved inventory management and expanded its online business significantly. This success story explores how the retailer slowly rebuilt itself after years of decline and became one of Australia’s most talked-about retail recovery stories.
In 2018, many started to write off Myer as a business of the past. The giant Australian department store retailer, was dealing with AUD$486 million statutory loss, had written off more than AUD$515 million in goodwill and its share price dropped below $0.40. Investors had run out of patience, Internet shopping was taking off and the business had become one of Australia’s biggest retail crash stories.
Myer had toiled with too much floor space, poor digital growth and relentless discounting. For years, many analysts pronounced the traditional department store model dead or dying, as younger shoppers increasingly favoured online retailers and fast-fashion brands.
But eventually, Myer had to reset itself rather than collapse altogether. After its rocky road under the CEO John King, the company began halting efforts to save its old retail model, focusing instead on reshaping itself around profitability, digital growth and operational efficiencies. However, the turnaround took place very slowly before Myer evolved from there to being a more disciplined and digital business.
It Needed An Entire Reboot of the Business
The first step for Myer towards any recovery was to admit that its old business model is broken. This is an era when customer traffic within retail hubs was quickly diminishing, and the retailer relied on large department stores. Meanwhile shopping online surged across Australia.
Myers online sales accounted for just about 7.7% of total sales revenues in 2018. The enterprise additionally held around 1 million square metres of retail space across the country, a lot of which had grown to be expensive and unproductive to operate.
Management finally figured out that the business could not carry on as usual forever. Most importantly, Myer had to cut costs, streamline its operations and double down on categories that could drive future profitable growth.
The Customer First Strategy
Myer put in place its Customer First strategy when John King was appointed CEO in 2018. The company started opting for profitable sales and operational discipline, as an alternative to chasing high volumes of sales at any cost.
The largest change was a decrease in the size of underperforming retail space. The company started to close less profitable stores and give back unused floors to landlords to decrease operating costs. The retailer focused on fewer product categories and became more selective rather than competing everywhere at once.
The strategy was not to grow quickly, but rather to initially build a firm foundation for the business. After years of a shrinking revenue base, management placed a strong focus on operational simplification, better inventory management and rebuilding trust amongst its customer base.
Focus on Online Shopping that Eventually Paid Off
Myer focused on e-commerce, which was one of the biggest reasons for its recovery. It placed greater emphasis on its website, digital fulfilment systems and click-and-collect services. This included a revamp of the online customer experience as well as integrating digital shopping deeper into physical stores, the retailer said.
The results slowly became visible. By 2024, the online sales share nearly tripled, accounting for approximately 21.6% of total company sales in contrast to 8% during the years of failure. That growth illustrated the extent to which the business has evolved toward digital retail.
Reducing Costs and Fixing Inventory
Another significant aspect of Myer’s turnaround was centred around cost reduction. Years of large store closures and operational waste had damaged profitability, so CTDB, the company’s Cost to Do Business, became a major focus for management.
It even fixed inventory management, which had become an Achilles heel for the company during its decline years. This massive reduction of old clearance stock allowed stores to look fresher and therefore less likely required heavy discounting. Old clearance inventory declined by almost 30%, according to Myer’s FY2023 results presentation.
The change was important because Myer had been forced to rely on heavy discounting in the past, which dented profit margins. Finally, even without ceaseless sales pushes, the company was able to take advantage of inventory turnover and improve profitability while avoiding excess stock.
The Financial Results Started Improving
It wasn’t an instant turnaround but a gradual improvement in the numbers. The retail chain reportedly swung back to profit in FY2023 reporting a Net Profit After Tax of AUD$71.1 million, its best showing in almost ten years. Gross profit margins likewise improved as the company stated it reined in excessive discounting and became more operationally efficient.
| Metric | Recovery Result |
| FY2023 Net Profit After Tax | AUD$71.1 million |
| Online Sales Contribution | Around 21.6% |
| Reduction in Clearance Stock | Nearly 30% |
| Improved Gross Profit Margin | 39.5% |
| Cost to Do Business (CTDB) | Improved to 24.5% |
| Main Strategy | “Customer First” transformation |
Just a few years earlier many thought Myer was in permanent loss. Although the company continued to exist in an extremely competitive retail landscape, it became significantly more disciplined and digital-first than at its inception.
A Retail Recovery Few Expected
Myer’s recovery, from years of financial strife and sluggish performance to one of Australia’s more compelling retail turnaround stories, was well underway. Management embraced the fact that the company needs significant structural change rather than persist with the protection of an obsolete department store model.
The company shrunk its unproductive space, invested deeper into digital retail, and prioritized operational efficiency over only sales growth. That change saw Myer slowly return to profit and made investors trust the company more.
Online competitors and increasingly disruptive consumer behaviour still pose challenges for the business, but Myer showed that even struggling legacy retailers can survive if they are prepared to keep pace with change. The company turnaround, however, to many other people systems can be the first call in project rebuild of returning back and evolve through failure personified companies.
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