Myer's automated warehouse issues hurt sales and profits

Myer, an Australian department store, faced significant challenges due to issues at its new automated warehouse. This warehouse has been delayed by two years and was fully operational only since August 2024. During the busy Christmas shopping season, many products were stuck in the warehouse, causing sales to drop by $8 million and negatively impacting profits. Myer’s half-year profits fell by 18.5% to $42.4 million, largely due to these distribution problems. The company could not fulfill online orders properly, especially in Victoria and Tasmania, where stores struggled to meet demand. Myer’s CEO, Olivia Wirth, stated that many exclusive brands were affected. The company has already spent an additional $5 million to address these issues. In terms of overall performance, Myer's sales saw slight growth of 0.8%. However, the growth was overshadowed by the difficulties at the warehouse. Myer’s online sales increased by 4.8%, and the number of active customers rose to 4.6 million. Wirth has been making changes at Myer since taking on her role in June 2024. She is looking to attract younger customers with new strategies, including a focus on online experiences and integrating new brands. The company has also restructured some internal departments, leading to potential job losses, but specific numbers have not been disclosed yet. Myer’s share price fell sharply after the news of these issues but recovered slightly by midday. The department store's plans to improve include enhancing its loyalty program and restructuring underperforming brands.