Coles Myer to spend $350M on stores

Press, 3 December 1987, Page 32

Coles Myer to spend $350M on stores

NZPA-AAP Melbourne Coles Myer, which has been buying shares in Progressive Enterprises, would invest more than sAust3so million in new stores, refurbishment and technology this year, said chairman and chief executive, Mr Brian Quinn. He said Coles Myer did not expect the sharemarket slump to greatly affect consumer confidence.

So far there was no evidence of a major downturn in its businesses, although there were some signs of a fall In some categories of merchandise.

Coles Myer remained Australia’s largest company in terms of sales and number of employees, and had a cash flow unequalled by any other Australian company, he said. The company had a substantial market share of basic necessities — food, clothing, footwear, and general merchandise.

The balance of sales between supermarkets, discount stores, hypermarkets, department stores and specialty stores gave the company a very strong base.

"Our customers continue to buy food no matter what economic conditions exist," Mr Quinn said. Discount stores traditionally improved market share when there was a downturn, and the group’s department stores were ideally positioned.

Profits for the first three months Of the financial year were significantly ahead of budget and the company was confdient of a strong trading Christmas.

Coles Myer was considering offshore expansion. The company held 10.97 per cent of Progressive Enterprises, the supermarket retailer and was negotiating to buy the 65 per cent held by Brierley Investments.

Progressive’s 53 stores earning S7SOM a year woW be a worthwhile investment at an acceptable price, he said.

If Coles Myer did not succeed in acquiring Progressive it would continue to assess other opportunities. The company would not invest offshore simply for the sake of it

“Our move into the international retailing scene will only be when we are confident that the proposed investment is secure, appropriate and likely to generate profits of an acceptable level.” Coles Myer’s net profit margin rose to 1.92 c in the sales dollar from 1.75 c, Mr Quinn said. Although Coles Myer

shares had been hit by the share slump their fall was less dramatic than the overall market and the fundamentals of the company were sound, he said.