Amid all the negativity in the media and financial community, MYR seems to be doing the things that you would expect a struggling department store chain to do – closing underperforming stores, giving back redundant space, making the format of remaining stores more interesting for customers, focusing on the online business (sales rising over 40% YoY). Analysts, journalists, the investing public (and, dare I say it, some punters on HC) tend to assume things should happen yesterday, but the reality is that they take time – months and years. The same applies whether building a new plant, creating a new drug, or turning around a department store chain – and there are bound to be hiccups along the way.
Meanwhile, at the current share price lows there’s always Solly Lew or some other interested party who’ll step up. For more on this, check out the article in The Australian yesterday, penned by Ticky Fullterton, entitled ‘Myer buyer: who wants the last Australian department store?’ It gets away from the ‘FY17 results are bad, Myer is doomed’ simplicities and unashamedly puts MYR into play as takeover target for Premier Investments (Solomon Lew), Woolworths (South Africa) or some other interested party.
I hesitate to copy and paste the entire content from a site with a paywall, but the gist is:
Woolworths (South Africa), which already owns David Jones, is a ‘potentially interested party’
Lew may not like the idea of Woolworths owning a second major department store in Australia.
Lew may be waiting for the share price to fall (further) (before making a move).
MYR Price at posting:
70.0¢ Sentiment: Buy Disclosure: Held
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