Department store Myer has seen online sales boom during periods of government-mandated store closures, and expects to report a small net positive cash position in its FY20 results.
In the last ten days in Melbourne Myer has seen a huge increase in demand for beauty products, with an overall increase in online orders growing by 310 per cent.
Within beauty skincare sales have grown by 430 per cent and fragrances and makeup 330 per cent.
Additionally, demand for homewares have once again grown, up 530 per cent, with small kitchen appliances being the fasted growth area.
Toys have seen a jump by 450 per cent, as parents look to entertain children who are unable to return to school temporarily, and women’s sleepwear and lingerie have grown by 320 per cent.
“With the recent announcement of stage 3 and 4 restrictions in Victoria, we’ve seen our Melbourne customers embrace online shopping to prepare households for the next six weeks,” a Myer spokesperson said.
“We’re prepared for an unprecedented demand in the next few weeks form our Victorian customers, [and are extending] a reduced free delivery threshold and a relaxed returns policy in place, as well as Covid-safe click-and-collect services at selected stores.”
The trend will be welcome news to Myer, which has been forced to close 11 stores throughout Melbourne for the next six weeks, and will be trading with a reduced staff footprint to service click-and-collect and ship-from-store orders.
The remainder of Myer’s Melbourne workforce “will not be required to work for the period of the store closures”.
During March Myer closed all 60 of its stores, and stood down approximately 10,000 team members. It isn’t clear how many staff are impacted by Victoria’s lockdown measures.
And while Myer will release its full year earnings in September industry rival David Jones revealed an 8 per cent decrease in total sales in FY20, impacted significantly by the government’s health advice to Australians to stay home.
It isn’t yet clear what Myer’s full year results will look like, though an extension for the business’ banking facilities should help the department store stay afloat in a period of extreme and rapid change in customer behaviour.
On Thursday afternoon Myer announced it had signed a binding term sheet with existing lenders to amend its banking facility until August 2022. The reduced amount of $340 million, Myer said, is a result of the business’ focus on its balance sheet – having cut its peak debt level from $290 million to $220 million in 2019.
“Securing this new facility with our existing lenders is a testament to the work that we have undertaken during the past two years,” Myer CFO Nigel Chadwick said.
“It is particularly pleasing to have secured this extension to our facilities during such an unprecedented time of economic and social disruption in retail.”