Is this the end of Myer?
They have been in competition with one another for years, but now the battle between retail giants Myer and David Jones could be about to end – with the South African company that owns David Jones, Woolworths Holdings (no connection to Woolworths in Australia), reportedly preparing a bid of $300 million for its longstanding business foe.
If it goes ahead, this would mean Australia would be left with just one high-end department store chain.
While the ACCC (Australian Competition and Consumer Commission), has been hugely circumspect about such a venture – mainly because it would remove both retail giant’s biggest competitor, it’s possibly too tempting for the regulators to turn down this time, due to the intense competition of online shopping and reduced consumer spending.
If a merger between David Jones and Myer does get the green light, you can expect to see stores closing and most likely one of the famous brands shutting up shop for good – with the victim being thrown on to the retail scrapheap in all probability Myer.
“There’s no advantage for David Jones in retaining the Myer brand,” Marketing Focus director Barry Urquhart told news.com.au.
“It will be like when Qantas took over TAA and almost the first thing that happened was the Qantas name took over.”
Last month, Myer announced an almost half billion-dollar loss for the first half of the financial year. In hindsight, David Jones is not necessarily a star performer, but the retail giant is still making a profit.
“Something has to happen because the market can’t sustain two department stores, so the logical piece is for Woolworths [David Jones] to buy out Myer,” Retail Doctor Group consultant Brian Walker told news.com.au.
“Australia is the third most over-shopped country in the word with something like one shop for every 325 people, and there’s just too many department stores.
“Myer has been in decline for 20 years, so creating a $5 billion department store chain with DJs will mean better negotiations with suppliers and landlords,” Walker added.
What do you think about the possible demise of Myer? Will you be sad to see the retail giant go?