Myer has had their best sales results in the last 18 years.
👉 Background: Myer is Australia's largest department store chain that's been around for 123 years. The past 15 years have been rough for the big department store, with their share price down more than 80% since its IPO in 2009.
👉 What happened: Now, Myer has had their best sales results in the last 18 years. They've made $3.4 billion in the last financial year, and saw profits go up by 23%.
👉 What else: But it's not all sunshine and rainbows for Myer. In their financial update, they warned that households are cutting back on their spending. And, Myer knows they need to be able to operate across the changing economic climate.
💡Managing economic cycles is key to sustaining and growing. Cyclical businesses are those that are sensitive to economic cycles. These businesses often sell products or services that people buy when the economy is booming. Think: discretionary items like luxury cars or jewellery.
💡Non-cyclical businesses sell things that people need regardless of how well the economy is doing. Think: non-discretionary items like toothpaste, soa or basic food.
💡Myer's strategy is to have one hand in either pie, bitta cyclical products, and bitta non-cyclical product so that they can ride through this cycle and come out a stronger company.
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