Myer

An open letter …

Mr Gary Hounsel CHAIR & Mr Nigel King CEO

Myer Holdings Ltd
PO Box 869J
Melbourne VIC 3001  Australia

CC:  Mr Solomon Lew - Premier Investments

Gentlemen,

As a bloke who grew up in Melbourne, was educated in Brighton, spent all my formative years in abject immaturity and wasted many many opportunities I should be the last person you listen to when it comes to your charge.  Indeed one of my burnt in memories was the Myer’s man delivering something for Mum the day JFK was shot.  The 22^nd of November 1963 was an important wake up call for the world.  In a couple of days it will be 55 years ago and we still haven’t learnt that respect and trust is a God given right.

I offer that rather banal insight into history because it helps define your store.  When Sidney Myer founded his department store it was inexorably linked to the person and, if I remember, that link followed through to Ken Myer before his death in Alaska.  A ‘family’ store where people connected with the ‘name’ despite not knowing them. 

Mum used to drag me along to shop at ‘Myers’, have lunch at ‘The Birdcage’ and have the days purchases either carried to a taxi or delivered to home.  The day two mink coats turned up at home was a watershed moment in understanding marital relations between one’s parents.  Myer’s had a soul and a true understanding of people and Mum was made to feel special.

Before forging into hospitality I spent too many years downsizing companies around the globe.  A bugger of a job made all the worse because it was my role to deal with the aftermath of bad board decisions which in turn necessitated disadvantaging too many people all through no fault of their own.  My memories are a bit vague but I seem to remember an imported CEO by the name of Dennis Eck totally missing the point that Myer [note – no ‘s’] was not Coles or Target where impersonal vertical marketing seemed at home but a caring ‘family’ company.  I also seem to remember Don Argus saved the day but I can’t be certain.  The point being that personality and ethos were removed and the business suffered.

Now it seems, personality has once again been removed and business is suffering albeit with Myer still in toxic denial mode.  Look at it from an objective viewpoint – untrained staff, rows of cheapish merchandise, staff who are impersonal and confused, a store undifferentiated [and all at once]and disassociated with their customer base.  The vision has either gone or been muddled to such an extent that customers are confused. For example, remember when the bargain basement was just run-outs and odd items?  I do but it seems the ‘bargain’ mentality has infected the whole store.  More confusion.  Now, it seems that the boxing day sale is a critical tool to bolster sales because people wait for it!  Low margins are the result.  Misery.

Feel free to tear this up right now if you like because I am going to offer an opinion.  In a couple of weeks time we are heading off to Scandinavia again for a month where we will eat in something approaching 100 restaurants researching and collecting ideas for our little bistro.  A bistro which already has multiple global awards yet we still very cognisant of continuing to source global trends, service and differentiating ideas.   

And, I believe that is the key – differentiation.  Let’s take Galeries Lafayette or Le Train Bleu [within Gare de Lyon] as examples in Paris both of which we have shopped and dined in many times and both of which offer a special experience yet both are flawed in many respects.  The point is that both have held their vision and communicated that vision and, as a result, do well despite the flaws.  Now look at your charge!!

The day we saw a dog fashion show at Galeries Lafayette or watched a waiter ‘strut’ a dozen bottles of Moet on a tray above his head at Le Train Bleu burned an image in our heads.  A positive image which overshadowed any complaints.

In my opinion you have 3 types of customers.  The so called upper middle class who want the finer things and experiences, the lower middle class who want to be seen and to be treated as though their elevated position is a natural state of play and all of us seeking a bargain.  This is a natural differentiation in the real world.

I opened this letter with comments about ‘respect and trust’ and this is what I remember most about Mum’s dealing with Myers’.  Because of Myer’s ability to make people feel special my mum, and thousands of others, spent an awful lot of money therein [see comment above on Mink].  But now Myer [no ‘s’] has turned into a jumble sale where no one feels special including I daresay the staff.

The upshot is that people [like me in a previous job] are forced to cut even more staff and amenities to save a bottom line.  Spiralling into misery! 

What should Myer[s] be known for?

McEwans had it with their Vision, ‘McEwans means a million things’ and Bunnings has it with lots of stuff and cheapest prices.  Both places where Eck would have felt comfortable with vertical marketing - but, not for Myer[s].

At the bottom, the bargain basement is a place where people can go and rabbit around looking for that ‘something’ to be bought on impulse.  Why?  Because bargains are not pre-planned.  See stuff, buy stuff.  Everyone likes to fossick.  This is not cheap imported for the purpose crap but real run outs, overstocks etc as anything else diminishes the image and is best left to Target etal.  A bargain is an item reduced to sell, not a cheap product brought in to mimic a real reduction!

In the middle I believe a huge albeit simple change is necessary to cater for modern ways of purchase.  Firstly, people want to try on or view something before purchase and secondly they want it pronto. Therefore there must be a try-on size range and then at purchase the staff member who must be able to say, ‘It’s on its way’ because as soon as the money has been accepted the message goes through to a store where it’s immediately dispatched and with a non-conditional return policy.  Indeed, there is also technology allowing people to see themselves with various garments on screen [?].  When I did my MBA in the 80’s I seem to remember a French knitwear company who started to knit the purchased garment as soon as the order was received and delivered same to the customer at the speed of light.  They were a forerunner indeed!  I think much better to sell say 1,000 lines of quality than 10,000 lines of rubbish with stacks of multiple sizes jammed into racks no one can see over.  Myer[s] did not offer rubbish but Myer does!!

At the top, people want an experience and providing that experience could be the vision and saving grace of Myer[s]!   Why not rekindle Sidney as the founder overseeing a new ethos where people are made to feel special and welcome in his emporium where the best is available, champagne bars abound, the ‘Birdcage’ makes a re-entry, the Mural hall has invited glamour events, dogs have fashion parades, chandeliers light the way, lots of upmarket accessories are on display, furniture is leather, staff are trained and plentiful and trust and respect are ingrained.  My Mum would have lived there because she was made to feel special and that is the image of Myer’s I remember in its halcyon days.

Lastly, this image must be created at the City store and then followed on elsewhere.  Why?  Because nowhere else has the history or has the Mural hall.  Vision and image go hand in hand.  Indeed, the ‘top level’ may only be available at the city store, the home of Sidney. Spooky, isn’t it.

Just a small example, the ‘Hopetoun Tea Rooms’ in the Block Arcade is immensely popular because they capture something of the past whereas their competition can only look on in envy.  Image and vision!

I have been and still am at the pointy end and the coalface of business in highly competitive industries [hospitality etal] and in the past have been stupid enough to delve into so called corporate rightsizing which is about as depressing a job as you can get.  These days we run a little bistro and consult globally when I believe we can add value.

My ‘opinions’ are not mere puff but based on too many years experience.  I really felt for Myers when Mr Eck was CEO because of the diminution of a Melbourne icon to foreign standards.  Likewise when the Mexican triumvirate hit Telstra.  Why do we allow this to happen?

A department store is an icon of the past, present and future because it allows many faces within a constructed ‘life’ ethos.  An ethos which saw Myer’s rise and rise and a now a lack of ethos which foreshadows misery and failure.