Myer Ltd is setting its sights firmly on the Western Australian retail scene with plans to establish a new distribution centre in Perth next year ahead of possibly opening two or three new stores.
Myer Ltd is setting its sights firmly on the Western Australian retail scene with plans to establish a new distribution centre in Perth next year ahead of possibly opening two or three new stores.
On a whirlwind trip to Perth today to visit stores and re-launch the Myer Card, Myer executive chairman Bill Wavish told WA Business News it had its mind on one particular site and would likely announce the commissioning of a new warehouse within two weeks.
Mr Wavish said the move would allow Myer to transport product direct from China down the West Coast to its six Perth stores rather than traditionally through the East Coast and across the Nullabor.
"It means we'll get product more quickly to market, more cheaply to market, and in better condition. It also means the WA stores will get new season's products earlier than the East," he said.
"It's unclear whether we'll lease or build, but we'll probably lease. Whatever we do it'll be one of the biggest warehousing transactions in the industrial market this year."
New owners, the Myer Family and private equity firms Texas Pacific and Newbridge Capital are used to doing big deals, having paid Coles Myer $1.4 billion for the 60-store chain in March.
Under a service level agreement, Myer shares 13 distribution centres with Coles Myer, including one at Perth Airport, but once this ends in mid-2007 the company should have its own distribution centres operational in Sydney, Melbourne, Brisbane and Perth.
Mr Wavish said Myer's main goal was to become more cost efficient and open new stores around the country.
He flagged the possibility of opening up to three new stores in WA in the short to medium-term, but said the company was not in a position to make any announcement soon.
"Myer hasn't been profitable for a number of years so we're in the process of turning that around. We believe with a $3.3 billion turnover you should be able to make money," he said.
The company will announce its half year result in late March 2007, and Mr Wavish believes everyone will be impressed with the results.
"We're six months into a three to five year turn around, and we're running well ahead of our expectations."
Responding to industry speculation that its Fremantle store may be on the chopping block, Mr Wavish said that was completely wrong and he was quick to point out the store was its number one performing store this year.
After a recent investment to upgrade the store internally, he said the store would be staying put and would continue to be an integral part of its WA portfolio.
