@KloggI think the G&A costs likely to be too high but erring on...

@Klogg
I think the G&A costs likely to be too high but erring on the side of caution.
There will be additional costs to deliver the online growth- guess it depends on capitalised/expensed mix. They've been generally quite conservative on capitalising costs for a fairly phenomenal digital asset to date, and I note there was ~20m committed capex in the AR this year.

I am yet to see any compelling evidence to suggest that department stores will have no future long-term with online. My understanding is that department stores have been around since the late 1700s in one form or another and that the competitive environment in the decade ahead is going to be decidedly more benign than previously. For instance:
- Almost zero chance of new overseas entrants to the market (Debenhams the latest casualty)
- All department stores reducing space at the same time. Target gone.
- Many fast fashion retailers also closing stores- see H&M, Zara
- There are actually very few standalone specialty retailers in the mid-priced range for apparel in both men's & women's.
- Pressure on leasing costs as the damage has been taken on the bad leases already (impaired ROU assets), with more negotiating power on floor space with short leases remaining. Well capitalised landlords can also afford to ride it out a little as they've all raised large amounts of capital now and can be strategic and think long-term.
- Major supply chain disruption benefitting higher volume retailers and impairing new entrants

Finally there are a lot of income statement costs and impairments that have already been taken in the last couple of years that should favour the cashflow statement over the years ahead.

For me, as long as the online business scales favourably, as every other online business appears to have done to date (and myer has a much higher proportion organic as opposed to paid user acquisition for obvious reasons, which is the major impediment to scaling), then the business will look after itself as they slowly equilibrate the perfect level of floorspace required (which should occur in the next year or two I would have thought).

Then the question is- what price do you pay for a business that generates 3B in sales at 40% gross margins....