Myer Holdings Ltd (ASX: MYR) shares sunk on Monday as competitive pressures and online headwinds were reflected in May's reported 0.93% sales fall for the third quarter to April 26 2014.
Myer's boss Bernie Brooks blamed the fall on the impact of store refurbishments across 3 of its top 20 stores in the period. It appears that's not washed with the market though as shares dropped more than 4% on Monday to $2.13 not far off the 52-week low of $2.04 reached earlier in the month immediately after the announcement.
More worrying is that this was the first quarterly total sales decline in two years as the effects of years of underinvestment and now competition from fast-fashion phenomenons like TopShop, H&M and Zara takes its toll on Myer's sales. These competitive pressures are likely to increase over time and Myer needs to find answers sooner rather than later.
The one silver lining for long suffering investors is that as the share price falls it may become more attractive as a takeover target to suitors. Recently rival David Jones Limited (ASX: DJS) accepted a takeover offer from South African retailer Woolworths Holdings Ltd.
