Myer has commenced a reset of sass & bide after opting to hold on to the specialty brand alongside Marcs and David Lawrence, and has started due diligence on a proposed merger with Premier Investment's Apparent brands. The update comes as the ASX-listed retailer reported a 2.9% dip in FY24 sales to $3.266 billion and a heftier 26% drop in net profit to $52.6 million.

According to its full-year results, Myer's comparable sales growth was virtually flat, up just 0.4%. It was a number the group said was an improvement on trajectory, despite no changes in the macro-economic retail conditions. A stronger number was its online group sales - up 2% to $704m and now representing 21.6% of total sales. This contrasts with $691m last year and $723m in FY22.

Across the board, Myer One loyalty program proved the strongest since its inception, with 77.2% of sales attached to one of its 10.4 million members. Myer also cited a 4.8% increase in active customers to 4.4 million (who spent in the last 12 months) plus 706,000 new members over the year, with more than half under 35 years old. It also boasted its strongest in-store customer engagement scores of 84.6% in FY24, up 210 basis points year-on-year. Myer noted loyalty members spend 82% more than non-members, and also noted those shoppers who are omni-channel spend 2.4x more than in-store only. With three in four digitally contactable, it's a very strong data set that further enables Myer to engage with customers, Wirth said.

Cost of business was up 1.3% to $834.7 million, while operating gross profit dipped 2.5% to $1.194bn.

Myer executive chair, Olivia Wirth, said the results reflected the ongoing challenges Australian retailers face in the soft market. "Myer has not been immune to the tougher trading conditions and inflationary environment in FY24," Wirth said on the investor call.

"Despite the tougher trading conditions, work undertaken by the Myer team in recent years has helped stabilize the business and established a foundation for future growth. With a highly engaged customer base, a leading loyalty program, positive comparable department store sales growth and high levels of trust in the Myer brand, there are significant opportunities for growth."

Usher in the findings from its current strategic review of Myer's retail platform. As confirmed in June, Myer plans to hold onto its sass & bide, Marcs and David Lawrence brands instead of selling them, noting that in the three quarters prior to FY24, these were showing positive earnings contribution. By contrast, these three specialty brands represented about half of the decline in net profit over FY24. The remainder of profit decline was costs of store closures plus inflationary pressures, Wirth said.

The plan now is to reset the sass & bide business to improve performance, work that includes closure 10 retail stores to leave just four standalone stores open. It's also restructuring support operations and new Myer concessions pads from Q1, 2025 and said Marcs and David Lawrence will get an expanded footprint within Myer. The company said it had also identified opportunities to leverage the Myer One loyalty program and omni-channel offering to promote and grow all three brands.

The second big ticket item is the potential merger with Premier Investment's Apparel Brands, which include The Just group, Portmans, Peter Alexander, Jacqui E and Dotti. The potential deal, revealed on 24 June, is progressing and Wirth said due diligence is now underway. The deal would see Myer acquire the business in exchange for the issue of new shares in the business to ASX-listed Premier.

"While this process is still underway, we are seeing opportunities to capitalize on the highly complementary nature of the businesses and potential cost and revenue synergies across supply chain, sourcing, property and brand management," Wirth said.

Premier Investment hasn't yet released its FY24 results for the 52 weeks ended 27 July - those are due out on 25 September. However, unaudited figures released showed global total retail sales of $1.6 billion plus EBIT of $341m and pre-AASB16 EBIT of $326m.

But in a signal of its own battles with the soft economic conditions, the retailer's first-half sales were $879.5m, down from $905.2m in H1 FY23, with gross profit also down from $576.2m to $558.6m.

As to FY25 early signs, Myer said the first seven weeks of trading saw comparable department store sales up 0.2% compared to the corresponding period last year.

- with additional reporting by Nadia Cameron