The Myer Holdings Ltd (ASX: MYR) share price will be one to watch on Wednesday after the embattled retailer provided the market with a strategy and sales update.
Here's what you need to know:
Strategy update.
According to the release, two years into its five-year journey the company is proud of its achievements, but recognises that it has a lot more work to do.
In order to ensure that Myer is relevant in a highly competitive and changing retail environment, it has signalled a heightened focus on its omni-channel business and experiential retail.
Management appears pleased that all of its metrics in its digital and online business are moving in the right direction. Sales, profitability, click and collect adoption, online traffic, and conversion rates are all increasing, and fulfilment times are falling.
Furthermore, the company believes the Myer One program and effectively using the customer data it creates will be highly important to its future success.
Sales update.
For the first 13 weeks of FY 2018 Myer posted sales of $699 million, down 2.8% on the prior corresponding period. On a comparable store sales basis sales were lower by 2.1%.
CEO and managing director Richard Umbers blamed the poor performance on the continuation of challenging retail conditions characterised by competitive pressures and weak consumer sentiment.
The result could have been worse had Myer's online business not continued its strong growth. Sales from its online business increased 67.8% on the prior corresponding period. Click and collect has grown to the point that it now represents 22.1% of all orders.
Should you invest?
While I do believe that Myer's online business is performing well, it still hasn't been enough to offset weakness in the rest of the business.
This is unfortunately what happens when you're late to the party and have to play catch up with low-cost online rivals.
I'm not confident that Myer will ever return to its glory days and so I won't be investing in its shares any time soon.
However, exisiting shareholders may want to wait and see what Premier Investments Limited (ASX: PMV) chairman Solomon Lew has to say at Myer's annual general meeting later this month before selling their shares.
