* Myer 2018 net loss A486 mln vs A$11.9 mln profit previously
* New CEO wants to cut sublet un-needed floors, fix online
* Company withholds final dividend for first year since 2011
* Shares down as much as 10 pct (Adds quote from investor Solomon Lew)
SYDNEY, Sept 12 (Reuters) - Australia’s biggest department store chain Myer Holdings Ltd on Wednesday posted its first annual loss since listing as it wrote down the value of its brands and shoppers switched to cheaper options online, sending its shares down sharply.
The struggling mainstay of high streets in Australia also withheld an end-of-year dividend for the first time in seven years and declined to give guidance about when its prospects might improve.
The result underscores the challenge facing new Chief Executive Officer John King, who plans to cut floor space, reduce non-customer-facing staff, end stock clearance sales and overhaul the company’s online offerings.
“Department stores can be relevant but you have to give people a reason to come in,” said King, a former CEO of British department store House of Fraser Ltd, who started in the role in June.
After visiting 44 of Myer’s 62 stores in his first 100 days, King said he wanted to talk to landlords about subletting entire floors and remove low-margin bargain tables, declaring “I hate them”.
He also wanted a more user-friendly website, noting that many online purchases led to brick-and-mortar sales when customers visited stores to pick up their goods.
Like many department stores worldwide, Myer and smaller rival David Jones, owned by South Africa’s Woolworths Holdings Ltd, have faced an existential crisis as internet giants like Amazon.com Inc undercut their business model by selling more products for less.
Australian discretionary spending has also stagnated as government instability and out-of-cycle interest rate rises erode consumer confidence.
As expected, Myer booked a net loss of A$486 million ($345.8 million) for the year to end-July, from a profit of A$11.9 million the previous year, largely due to an impairment charge on the value of its brands.
Excluding one-off items, Myer’s underlying net profit more than halved to A$32.5 million as sales dipped 3.2 percent to A$3.1 billion, its worst performance since listing in 2009.
Myer shares fell as much as 10 percent in morning trading before recovering slightly, in a flat overall market. The stock was down 4 percent at around 41 cents a share, a tenth of its issue price a decade ago.
“The market’s a bit impatient on signs of a turnaround,” said Daniel Mueller, a portfolio manager at Vertium Assets Management.
Solomon Lew, a retail investor who has criticized Myer’s leadership since buying an 11 percent stake in 2017, said the result showed the company was badly managed.
“The board of Myer is an absolute disgrace,” Lew said in an emailed statement.
“It will be run from now on by its bankers,” he added in a reference to a new debt facility.