Myer profits drop … ASIC to investigate timeshares … Could Kmart, Target and Officeworks become one company?

Department store Myer has announced a full year profit after tax of $67.9 million, a drop of 1.9% on last financial year.

Chief executive Richard Umbers said this morning the company is “obviously disappointed” to not have reached its targets amid a challenging environment and subdued consumer sentiment over the past 12 months.

The “New Myer” strategy is still in place, and in a note to shareholders this morning the company said it is a “leaner” and more efficient retailer than 12 months ago.

The retailer has faced a challenging year in its women’s fashion categories, with the collapse of Topshop Australia seeing it write down its 20%, $6.8 million investment in the brand, while sales of local imprint sass & bide were down $10.9 million compared with last year, according to the investor presentation.

ASIC to scrutinise timeshares

A flood of consumer complaints has prompted the Australian Securities and Investments Commission to begin investigating the timeshare holiday sector in Australia, reports the ABC.

Concerns include that consumers are lured into the schemes, some of which allow users to generate points to redeem at holiday properties, by companies using aggressive sales tactics.

The regulator has asked for consumer and industry input as it reviews the sector, with the Consumer Action Law Centre reporting customers were being “lured” to sales seminars and then pressured into signing up for poor value products.

Kmart, Target, Officeworks mega-business on the cards

The Australian reports market insiders have suggested Wesfarmers is looking to move on “major corporate activity”, and this could extend to spinning off its three discount department and homewares brands into one company, which could then be listed on the Australian Securities Exchange.

The report suggests investment banks have been pitched the idea of there being a demerger or an initial public offering of the three brands, which together would create a $6 billion company.

Earlier this year, speculation was rife that stationery retailer Officeworks would be sold or spun off from Wesfarmers, but the retail giant later told the market it had decided against that option.

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