If any further evidence is needed of just how big a disaster the Myer department store business is for Coles Myer, then the interim results from rival David Jones today has provided it. Far more profitable, far more efficient, and just better retailers would have to be the bottom line after David Jones produced gross and net after-tax profits and margins greater than Myer contributed to the Coles Myer result a week ago.
That’s even though in terms of sales and store coverage, Myer is far bigger. David Jones revealed a 22% growth in net profit to $52.9 million with a 20% lift in dividend from 5 cents to 6 cents. It was the highest first half profit the company had recorded since listing in 1995, a long time admittedly, but better late than never.
The results show the full extent of the David Jones success and by implication the failures at Myer. DJ’s store operations produced earnings before interest and tax at $59.6 million, compared to Myer’s $60.7 million on sales 70% higher. DJ’s retail ebit margin of 7.8% was double that of Myer’s 3.64%, the ultimate sign of just how far in front the Sydney based retailer is.
Total earnings before interest and tax (including the lucrative credit card operation were $76.5 million, an increase of 20.7% and a very sweet number for the two executives Coles Myer (especially Solomon Lew) let slip through their fingers eight years ago. Mark McInnes and Robert Goddard were high fliers at Coles Myer going nowhere until Peter Wilkinson, the former DJ’s boss, headhunted them as Crikey pointed out last November .
The rest, as they say is history. David Jones up, Myer struggling. And McInnes and Goddard a better value-for-money package than the high profile Dawn Robertson is for Myer.