DIRECTORS’ REPORT Continued FY2018 OPERATIONS performance of the Executive Chairman. During the year the Board made significant leadership changes • Myer also announced on 21 March 2018 that all Board with a number ofnewexecutive appointments. members will target the purchase of a shareholding in the Company that is the equivalent to at least one year’s John King was appointed as Chief Executive Officer and director’s fees within three years. This was codified in the Managing Director and Allan Winstanley was appointed as the amended Board Charter and Relationship with Chief Merchandise Officer in June 2018. Nigel Chadwickwas Management. appointed as Chief Financial Officerin January 2018. • John King was appointed Chief Executive Officer and With these appointments, Myer bolstered its globalretailand Managing Director on 4 June 2018 and Garry Hounsell financialexpertise, bringing best-in-classexperience with highly ceased his role as Executive Chairman on 3 June 2018. relevant retail, merchandising and financialskills. • Allan Winstanley was appointed Chief Merchandise Officer During FY2018 there were a number of achievements: on 25 June 2018. Total online sales were $239.4million (including $30.8 9.BUSINESS STRATEGIES AND FUTURE • DEVELOPMENTS million in sales via in-store iPads, sass & bide and Marcs and David Lawrence (MDL) online sales, and Myer Market). Since joining in June 2018, Myer Chief Executive Officer and • Our online business had a good year with sales growth of Managing Director, John King, has completed a detailed review 34.1% to $192.5 million which was on the back of a strong of the business, including visiting 44 stores and has met with performance in 2017. customers, team members, suppliers, brand partners and • We opened the redeveloped Myer Hobart store, which now landlords. occupies approximately 12,500 square metres of selling He has announced his Customer First Plan to work more closely space. with suppliers and brand partners to put customers first in every • Refurbishment works were completed at Eastland action we take,and every decision we make. Through the plan, coinciding with the launch of the first dedicated children’s Mr Kingwants Myer tobe Australia’s favourite department store: play centre, Monkey Mania, a market leader in children’s providing friendly, helpful service;high quality andexclusive play centres. brands; and offering compelling value. • Refurbishment works commenced at Blacktown and at The Customer First plan to turnaround the business and Maroochydore in Queensland with ongoing works at Castle improve shareholder value is as follows: Hill in New South Wales. These works are scheduled to be completed prior to the commencement of the 2018 Focus areas: Christmas trading period. Transform customer experience in store; We closed the Colonnades store in South Australia. • • ‘Only at Myer’ brands and categories; value for money; and • In addition to these achievements, section 8 and 9 provide an • Continue enhancing myer.com.au. outline of Myer’s corporate developments and strategy. These should be read in conjunction with section 10, which describes Efficiency levers: factors that could impact Myer’s results. Simplified business processes; • 8.SIGNIFICANT CHANGES IN THE STATE OF • Efficient from factory to customer; and AFFAIRS IN FY2018 • Accelerated cost reduction. In addition to those matters described in section 7 above, the following significant changes occurred during FY2018: 10. KEY RISKS AND UNCERTAINTIES • Anewdirector,Garry Hounsell, was appointed to the Board The Group’s strategies take into account the expected operating of Myer HoldingsLimited in September 2017.His and retail market conditions, together with general economic background, experience and particular skillsthat he brings conditions, which are inherently uncertain. to the Board are set out on page 13. • Anewdirector, Julie Ann Morrison, wasappointedto the The Group has structured proactive risk management Board of Myer Holdings Limited in October 2017.Her framework and internal control systems in place to manage background, experience and particular skillsthat she brings material risks. The key risks and uncertainties that may have an to the Board are set out on page 14. effect on the Group’s ability to execute its business strategies, • PaulMcClintockAO and Anne Brennan each retired from and the Group’s future growth prospects and how the Group the Board with effect from 24 November 2017. manages these risks, are set out below. • MarkCripseywaspromoted to Chief Operating Officer on EXTERNAL RISKS 29 January 2018. Macro-economic factors such as the fluctuation of the Australian • NigelChadwickwas appointed Chief Financial Officerwith dollar and interest rates; poor consumer confidence; changes in effect from 29 January 2018.Grant Devonport stepped government policies; external, natural or unforeseen events, down as Chief Financial Officeron 28 January 2018. such as an act of terrorism or national strike; and weakness in • Richard Umbers stepped down from hisrole as Chief the global economy could adversely impact the Company’s Executive Officer and Managing Director on ability to achieve financial and trading objectives. Myer regularly 14 February 2018 and Garry Hounsell wasappointed as analyses and monitors economic and other available data to Executive Chairman on that date. help mitigate the future impact on sales, and has implemented • On 9 March 2018 S&P DowJonesIndicesannounced that conservative hedging, capital management, and marketing and Myer would be removed from theS&P/ASX 200 Index. merchandise initiatives to combat the cyclical nature of the • On 21 March 2018 Myer announced a reduction in business. remuneration for Board members, the remuneration of Garry Hounsell while he was Executive Chairman and the establishment of a Special Board Committee to oversee the 20 Myer Annual Report 2018