(Recast, adding analyst comments, stocks)
March 4 (Reuters) – Australia’s Myer Holdings Ltd said on Thursday store closings due to the COVID-19 pandemic led to a 13% drop in first-half sales, sending department store operator shares to their lowest in almost two months.
The 120-year-old retailer, the country’s highway icon, said sales fell to A $ 1.40 billion ($ 1.09 billion) for the six months ended January 25, from A $ 1.61 billion last year, due to movement restrictions. especially hitting sales. in metro cities like Melbourne, Sydney and Brisbane.
Myer and other brick and mortar retailers have been hardest hit by the pandemic, and have had to rely on millions of dollars in government support.
While Australian retailers benefited from an economic rebound late last year as the country eased restrictions, Myer’s results suggest it still relies heavily on government support to keep operations going.
Myer received A $ 51 million as part of the government’s JobKeeper payment scheme aimed at supporting businesses significantly affected by the pandemic, and was also granted A $ 18 million in rental waivers in connection with store closings.
However, his online sales proved to be a bright spot as they jumped 71%. They account for 21% of total sales, double last year’s share.
“Management has indeed shown that they will continue to invest online. That makes a lot of sense, ”said Johannes Faul, director of equity research, Australia & New Zealand, Morningstar.
“In the long term, the general online channel will grow and the physical footprint will decline for Myer, while sales will be reallocated to the online channel.”
Profit attributable to shareholders for the period rose to A $ 43 million from A $ 24.4 million a year earlier, helped in large part by benefits from the JobKeeper scheme and lease relief.
The company does not pay dividends, continuing the suspension since 2018. ($ 1 = 1.2862 Australian dollars) (Reporting by Arundhati Dutta and Nikhil Subba in Bengaluru; Editing by Amy Caren Daniel and Rashmi Aich)
