3 Min Read
* Myer Q3 total sales down 0.9 pct as three key stores revamped
* Comparable store sales up 0.2 pct
* Says will watch David Jones strategy (Recasts and adds analyst comment)
By Maggie Lu Yueyang
SYDNEY, May 2 (Reuters) - Australia's Myer Holdings Ltd logged its first quarterly decline in total sales in two years while it revamped three of its top department stores, sending its shares sharply lower.
The country's biggest department store operator has seen profits decline steadily since 2010 as the sector grapples with an influx of foreign fast-fashion apparel retailers and growth in online shopping.
Last month Myer walked away from a takeover proposal for David Jones Ltd after its rival agreed to accept a $2 billion offer from South African retailer Woolworths Holdings Ltd.
While investors were happy that Myer would not be biting off more than it could chew, Woolworths' move has fed concerns that it will be on the defensive against a souped-up David Jones.
Third-quarter total sales fell 0.9 percent to A$646.5 million ($600 million), Myer said in a statement on Friday. Comparable store sales rose 0.2 percent.
But it said the fourth-quarter is set to benefit from the re-openings of its Adelaide store and its Indooroopilly Store in Brisbane. Its Melbourne city store is also expected to get a boost from the opening of 7,000 square meters of new space.
Shares in Myer fell as much as 6 percent after the quarterly update to hit its lowest since December 2012. They later pared losses to trade down 2.3 percent. David Jones edged up 0.1 percent, compared with a flat broader market.
Myer Chief Executive Bernie Brookes told reporters on a conference call that the company would be watching David Jones' strategy but declined to elaborate further. He also declined to comment on the possibility of other M&A discussions.
Credit Suisse analyst Grant Saligari said Myer could be attractive to some potential bidders at the moment given the slide in its share price.
"There is no one there I could identify at this point of time would be strongly likely to do it, but Myer is an essential business in this market, with prices right you could see some interest."
Woolworths has said it plans to boost David Jones' private label and onliness businesses as well as entice more customers to use its branded credit card.
$1 = 1.0785 Australian Dollars Reporting by Maggie Lu Yueyang; Editing by Edwina Gibbs