Myer, how the rules of the retail game have changed

Department stores the world over are struggling to keep up with a shifting shopping culture
IT BEGAN with a young Russian Jew named Simcha Baevski, a migrant boy with a thick moustache and a penetrating gaze who arrived in Australia in 1898 to join relatives running a business in Flinders Lane. Soon afterwards “Simcha” became “Sidney”, and Baevski changed his surname to Myer (from Meir, the middle name of a dearly loved brother who had died).
The new names rolled more easily off Australian tongues, and the change is probably what cemented Myer’s name in the local slang. “More front than Baevski’s” doesn’t have the same alliterative charm as “More front than Myer’s”.
But the store with Bourke Street’s wide frontage was some years away. The business that would grow into the southern hemisphere’s largest department store began with the opening of a small drapery shop in Bendigo.
It was in 1911 that Sidney and his brother Elcon moved to Bourke Street. In 1914, their shop was expanded into an eight-storey building. In the 1930s that building took on the art deco look now so familiar to Melburnians; Sidney Myer began a huge building project to refurbish the front of the store in an attempt to relieve the suffering of mass unemployment. His generosity during the Depression was one of the main reasons Myer became such a big part of Melbourne. He fed thousands of hungry people, including 11,000 at one Christmas dinner at the Exhibition Buildings.
Myer defended his financial “recklessness” over the building project, saying: “If only half the great businesses . . . of this country would do what I am doing, the Depression would be over in a week.”
His vision extended to business as well as philanthropy. It was said that when he introduced his Monday Star Bargains, the traditional washday routine of thousands of women changed. His genius for display revolutionised store design and his ideas were copied in England and America.
After his death in 1934, the store that he founded grew into a chain of 70 retail outlets, and the name he adopted as his own became a household word around the nation. But Myer passed out of the family’s control in 1985, when the public company known as The Myer Emporium Limited was taken over by the Coles supermarket chain after protracted sharemarket wrangling.
It was always going to be an awkward marriage. Coles was a budget operator whose slogan had once been “nothing over 2/6”, while the matronly department store’s strength was that it attracted a wide range of shoppers. It boasted, “Myer is Melbourne”.
But Myer, like department stores the world over, is now struggling. Retail spending in big generalist stores is slowing as consumers turn to small specialist shops, budget chains and warehouse outlets such as DFO. Analysts say Myer has problems: too many stores, stores in regional centres where farming communities have little discretionary spending, and a labour-intensive structure with large overheads.
Myer stores have had several makeovers in an attempt to maintain ground. At one point, following an American trend, merchandise was packed high and densely and staff were cut. (Shoppers loathed it.) Merchandise was consequently distributed more airily and staff levels increased but to little avail. The flagship Bourke Street store – a landmark in many Victorians’ childhoods because of its Christmas windows, a tradition begun in 1956 – is criticised as being simply too big for today’s shoppers.
Stephen Ogden Barnes is the program director for the Australian Centre for Retail Studies at Monash University. He sees Myer as a victim of a global trend. “Department stores these days are probably the hardest retail game to be in,” he said. “They have very low profit margins and plenty of things that can go wrong, like having to order a year in advance and being dependent on fashionability. It doesn’t take much to chip into profit margins if things go wrong.”
He said that department stores that did well had gone either up – or down – market. “If you stay in the middle of the road, you’re going to get run over,” he said.
– George Coles and his brother open their “nothing over a shilling” variety store in Collingwood in 1914, with a staff of six.
– The Coles family open a bigger Collingwood shop promising “nothing over 2/6”.
– Opens its first city store in Bourke Street in 1924.
– Four years later, GJ Coles and Coy – with eight stores and annual turnover of more than 500,000 pounds – floated on stock exchange.
– Expands to Sydney in 1928 with turnover topping 1 million pounds.
– Opens first supermarket, in North Balwyn, in 1960. By 1968, it has 100 New World supermarkets.
– Rapidly expands across Australia, adding specialty liquor, fast food, footwear and fashion stores as well as Kmart in 1980s, with Coles’ net profit topping $100 million for first time in 1984.
– In 1911, Russian migrant Simcha Baevski, aka Sidney Myer, buys a drapery in Bourke Street Melbourne, after running two stores in Bendigo.
– The company opens the three-storey Store For Men in 1920.
– Sidney Myer, at height of Depression, donates 22,000 pounds to provide work for jobless married men on Yarra Boulevard.
– Flagship Bourke Street store completed in 1935 as it stands today.
– Launches first “Christmas windows” in 1956 with Olympic theme and opens Sidney Myer Music Bowl in 1959.
– Opens first Target store in 1970 and adds other stores quickly, including Country Road fashion chain in 1981.
– Pulls off coup with purchase of NSW’s Grace Bros department stores.
– In 1985, the two Melbourne-bred retailers merge to create giant corporation boasting $10 billion annual sales, 1518 stores and 139,000 staff.
– The new corporation expands further into nearly all areas of retailing

First published in The Age.

A business leader politicians hope will come to their party

No wonder political parties have lined up to seek Margaret Jackson’s hand in pre-selection. She conducts a very media-savvy press conference.

There is the poise (ankles neatly crossed, just like royalty on a podium); the modulation (her voice is pitched low and even, forcing listeners to attend if they are to hear); and the delicate allusions to professional triumphs (she managed to dissuade Jeff Kennett from privatising the Transport Accident Commission, even though she had been appointed its chairwoman to do just that).

Yesterday Ms Jackson, one of Australia’s most powerful company directors, announced her resignation from the TAC after eight-and-a-half years at the helm.

She said she hoped to spend more time on her role as chairwoman of Qantas Airways and on her many other business and community commitments, which range from the ANZ Bank to four medical research institutes.

“I also have two children, a husband and a rose garden, but I rarely smell the roses, so I’m hoping I’ll find more time for all those things,” she said.

In 1995, when she was still a director of BHP, it was estimated that Ms Jackson sat on the boards of companies with a combined market capitalisation of $50billion. It was a long way from life as a country girl in Warragul, where she went to the local high school and her father was general manager of the hardware shop.

Now 48, she looks 10 years younger. She has a warm and engaging manner – but she has also been on three boards that presided over the departures of their chief executive officers.

Yesterday Ms Jackson said her achievements included converting the TAC from a branch of the public service to a global leader in insurance. Its staff today are better educated and she was proud that for half of her time as chairwoman, 50per cent of the board members had been women.

After years of weekly bulletins on road tolls, she has carnage off pat. “Every day, there is somebody that dies, on average; every eight days, someone becomes a paraplegic or a quadriplegic; every four days someone has a brain injury; and about every two hours, someone has a modest injury like a broken arm or a broken leg.”

She leaves determined to prepare her own children for the roads. When her son gained his learner’s permit three weeks ago she took him out in the car the same day, and that weekend he drove the family to Hotham.

“A lot of my friends said, `Are you insane?’ But I said `No, because kids need practice,”‘ she said firmly. “Yes, I’ve been a white-knuckled person, and yes, I’ve screamed, `Stop!’ but three weeks later he’s a lot better driver.”

The TAC had put Ms Jackson on her own learning curve. She arrived on the job convinced, she said, that such a state-run concern was “an ideologically unsound industry”. She soon realised that privatisation would lead to a higher road toll and higher insurance premiums: “There are exceptions to every rule.”

There have been rumors of overtures to Ms Jackson regarding a political career, which she cagily confirms. “Over the years I’ve been asked to do all sorts of amazing things, including put my hand up for preselection for seats.”

Which side of politics made the approach – or was there more than one? She grinned. “There’s been more than one. But I’m quite an apolitical person. I regard politicians with great respect but, for myself, I would rather play in other places.”

First published in The Age.