Coles Myer has announced, it has decided to sell its Megamart stores.
In Coles Myer’s Q4 2005 sales report, the company reported that Megamart recorded a sales decline of 5.9 per cent for the year, with comparative sales down 9.1 per cent. Although electrical sales at Megamart continued to improve following a re-launch of the brand last December, however it’s facing difficulty with furniture sales.
Coles Myer is expecting Megamart to record a full-year EBIT loss approximately $35 million dollars. According to Coles Myer CEO, John Fletcher, following a detailed review of the Megamart business, the results showed that it still did not have the size and scale to compete effectively in an extremely competitive marketplace.
“Following the review we have decided to divest its nine stores. We have begun the development of Coles Myer’s next five-year strategic plan, which will consider ownership options for our Myer business, including retention, de-merger and de sale,” said Fletcher.
Overall Coles Myer announced full-year sales of $36.6 billion, an increase o 13.3 per cent for the 52 weeks ended July 2005. Underlying earnings are expected to be in the order of $675 million, up to 17 per cent.