One for the accountants: Debt RISK?

the old lady Myer is definitely in an interesting space right now.

I'm trying to build an objective investment case for this former monarch of aussie retail, but with my background in retail rather than finance, I'd love for some simple analysis of the current Debt covenant situation that Myer is in.

Additionally, I see the following as key turnaround initiatives that will drive the business and Share Price.

1. Comp Sales / Traffic increases
- need to see Myer achieve at minimum flat levels of comparative sales and traffic.
- as a potential investor, I'm looking for an in-store Experience + Brand mix improvement strategy from the new CEO to drive consumer appetite

2. GPM% stabilization
- myer has a history of relying on supplier contributions to prop up GM.
- secondly, whilst digital growth is sexy, it's dragging down gross margin % due to higher costs (and probably a strong mix of discounted product selling online)
- myer simply has to find a way to sell product at full price. full stop.
- I'm looking for a very senior Merchandise / Buying appointment from the new CEO to help bring in an improved brand mix for the consumer which will drive traffic (pt 1 above) and improve margin through stronger sales @ full price.

3. Debt / Balance Sheet management
- I don't know how real the risk of breaching debt covenants is ... PLEASE HELP someone with some insight here ??
- but I would expect this is #1 priority for new CEO and chairman (who is an accountant by the way).
- I'm expecting an announcement in the next 90 days on a renegotiation of debt based on this comment in the H1 release (we have commenced discussions to facilitate an orderly refinancing based on Myer’s future debt requirements)
- I'm pleased we saw the write-down of intangibles already, as this is one of the 2/3 key steps to balance sheet strengthening which will take Myer out of the risk of complete capitulation.

Myer can't 'discount' its way out of its current situation.
We need to see (a) balance sheet strength, (b) a GM% improvement strategy and (c) some Global level executive appointments on merchandising / marketing if the turnaround will succeed.

I have a small position on Myer at 39c.
I believe we can achieve normalized EPS of 8-9 cents by 2019 based on the above, and believe the share price should warrant 90c-$1 within 12 months if so. Based on CEOs early plans and balance sheet strengthening, I will be adding significantly to my Myer holding at under 50c in the next months.

I welcome any rational feedback and analysis ??!!