Annual ReportAnnual 2011 Annual Report 2011 Strong Foundations Myer Holdings Limited ABN 14 119 085 602 Annual Report 2011 105090 Cover CS5 R1.indd 1-3 13/10/11 2:40 PM MYER HOLDINGS LIMITED Annual Report 2011 Corporate Directory Registered Office details Myer Customer Service Centre Myer Holdings Limited PO Box 869J Level 7 Melbourne VIC 3001 800 Collins Street Phone: 1800 811 611 (within Australia) or Docklands VIC 3008 +61 3 8667 6000 (outside Australia) Phone: +61 (0) 3 8667 6000 Fax: +61 (0) 3 8667 6091 Myer Support Office Auditor 800 Collins Street PricewaterhouseCoopers Docklands VIC 3008 Level 19, Freshwater Place Phone: +61 (0) 3 8667 6800 2 Southbank Boulevard Southbank VIC 3006 Myer Postal Address Myer Holdings Limited Securities Exchange Listing PO Box 869J Myer Holdings Limited (MYR) shares are listed on the Melbourne VIC 3001 Australian Securities Exchange (ASX). Company Secretary Website Marion Rodwell www.myer.com.au General Counsel and Company Secretary About this Annual Report Shareholder Enquiries: The Myer Holdings Limited Annual Report is available Contents Share Registry online at www.myer.com.au/investor. Hard copies can be Computershare Investor Services Pty Ltd obtained by contacting our share registry. Annual General Meeting Postal address Annual General Meeting About Myer 02 GPO Box 2975EE The 2011 Annual General Meeting of The 2011 Annual General Meeting of Myer Holdings Melbourne VIC 3000 Highlights 04 Myer Holdings Limited will be held at Limited will be held at Mural Hall, Level 6, Myer Mural Hall, Level 6, Myer Melbourne, Myer Shareholder Information Line Melbourne, Bourke St Mall, Melbourne, Victoria on Friday, 25 November 2011 at 11am. Bourke Street Mall, Melbourne, Victoria 1300 820 260 (within Australia) From the Chairman 06 +61 3 9415 4332 (outside Australia) on Friday, 25 November 2011 at 11am. www.investorcentre.com From the CEO 08 Investor Relations Davina Gunn Review of Operations 10 Investor Relations Manager Phone: +61 (0) 3 8667 7879 Sustainability 20 Mobile: +61 (0) 400 896 809 Email: [email protected] Board of Directors 24 Media Relations Jo Lynch Management Team 26 General Manager Corporate Affairs Phone: +61 (0) 3 8667 7571 Mobile: +61 (0) 438 101 793 Corporate Governance Statement 28 Email: [email protected] Directors’ Report 35 Remuneration Report 40 Financial Report 54 Auditor’s Report 111 Shareholder Information 114 Corporate Directory Inside Back Cover Myer Holdings Limited CREATED BY DESIGNATE ABN 14 119 085 602 105090 Cover CS5 R1.indd 4,6 13/10/11 2:40 PM 01 Myer Holdings Limited A focused retail business with strong management Our significant investment since 2006 has set strong foundations for a sustainable business, demonstrated in the current challenging environment. We are committed to optimising our store network, improving customer service and delivering a leading omni-channel offer. 11141_MYER_AR11_Editorial_PPv1.indd 1 10/10/11 11:58 AM 02 MYER HOLDINGS LIMITED Annual Report 2011 About Myer Myer is Australia’s largest department store group, synonymous with style and fashion for over 100 years. Known for a welcoming, familiar, trusted and New stores and refurbishments stylish shopping environment, Myer has a strong The Myer store network includes a footprint of connection with its customers, with one of the 67 stores in prime retail locations across Australia. most reputable retail brands in Australia. We have stores in 28 of the top 30 shopping centres Vision: “To be an international-class retailer providing across Australia. We have a strategy to expand the inspiration to everyone” store network through new stores, replacement Our focus on providing inspiration to everyone stores and refurbishments, and to continue to build includes our customers, our 13,000 team members, on the momentum of our world-class, international our 56,000 shareholders, our 800 suppliers globally award winning flagship Melbourne store. and the many communities that we engage through our strong brand. Myer Exclusive Brands In financial year 2011, total sales were $3.159 billion. Our merchandise offer includes over 50 brands that are Myer is a significant employer and has a long history of owned by Myer. The Exclusive Brands offering is across philanthropy and local community engagement. many price points and ranges from entry-point basics to designer fashion. We have established Global Sourcing Inspiring and delighting our customers Offices in Hong Kong and Shanghai to drive further through newness, innovation and growth of our Myer Exclusive Brands (MEBs), source inspiration product more efficiently and improve profitability. 01 Myer offers eleven core product categories MYER one loyalty program including: Womenswear; Menswear; Youth fashion; Childrenswear; Intimate apparel; Beauty, fragrance The MYER one loyalty program is a key competitive advantage for the business. This loyalty program and cosmetics; Homewares; Electrical goods; Toys; 01 Our team members are Fashion accessories; and General merchandise. A true provides unique insights into customer shopping key to the success of Myer preferences and is an effective way of communicating department store, Myer offers a comprehensive and 02 New stores and fashion focused ‘whole of home’ solution, stocking with our customers ensuring they receive relevant refurbishments continue over 600,000 product lines, comprising 2,400 brands and targeted offers. Loyal MYER one members earn to inspire and delight our customers sourced from over 800 suppliers globally. The brand shopping credits for shopping at Myer as well as a offering includes well-known national brands, range of affiliate businesses that have partnered with 03 Brand awareness is Australian and International designers, as well as the program. Rewards are distributed in the form of enhanced through in-store MYER one reward gift cards and when redeemed in theatre and events as over 50 brands owned and distributed exclusively by well as seasonal fashion Myer stores members spend on average 3.6 times the Myer, including Vue, Basque and Blaq. launches value of the reward card. 04 Exciting new brands Myer’s strategic plan Selling space optimisation have further strengthened The business model we have had in place since 2006 our fashion credentials Across our store network, we continually review is flexible and sustainable which has helped us to 05 We are building a manage recent volatile retail trading conditions. We the way our stores are presented through product customer service and performance-based culture continue to implement this strategy focusing on the mix and brand placements. This is to ensure we across the business key elements: are delivering the best possible merchandise offer, improving the customer shopping experience and 06 Our MYER one loyalty › New stores growth and refurbishments ultimately achieving maximum return per square program delivers a key › Grow our Myer Exclusive Brands metre of selling space for our shareholders. competitive advantage › Build and strengthen MYER one loyalty program › Ensure product mix and floor selling space delivers optimal financial returns › Improve customer service › Deliver a flexible omni-channel offer › Continue to reduce shrinkage 11141_MYER_AR11_Editorial_PPv1.indd 2 10/10/11 11:58 AM 03 02 03 04 Improving customer service Reducing shrinkage Our people are critical to achieving our vision and Reducing the level of theft and fraud in our stores delivering our strategic plan. We are continuing to contributes to improving our profitability. We have build a customer service and performance-based made excellent progress in initiatives to reduce culture across the business. This includes fostering the shrinkage. development of all of our team members from our graduates, to high performing store managers to our Strong foundations buyers and support office teams. The support of our We have made significant progress on our strategic committed and experienced senior management plan. We have invested over $600m in capital since team helps to build this culture focused on achieving 2006 to build a sustainable retail business platform results. In response to customer feedback, we have and these strong foundations have been proven a renewed focus on improving customer service during the recent economic downturn. through the investment in additional selling hours 05 in high service categories and a comprehensive program including training, product knowledge and Our vision is to be an other initiatives. international-class Omni-channel retailer In a rapidly changing technology environment Myer retailer providing continues to develop and implement a flexible inspiration to everyone omni-channel offer for our customers. The channels include our significant store network complemented – our customers, team by enhanced online, digital and mobile platforms. members, shareholders and suppliers. 06 11141_MYER_AR11_Editorial_PPv1.indd 3 10/10/11 11:58 AM 04 MYER HOLDINGS LIMITED Annual Report 2011 Highlights Myer delivered a solid result this year in the context of a ” very tough retail environment. Consumers continue to be reluctant to spend in the face of a number of increased cost of living pressures, the imminent imposition of new taxes, uncertainty surrounding interest rates and an increased propensity to save. The challenging economic conditions experienced in the first half were exacerbated Strong foundations by the floods in Queensland and Victoria. During the second half of the year domestic and global