Myer says it may float this year

Department store giant Myer says it is assessing market conditions with an eye to possibly listing on the Australian Securities Exchange as early as this year.

In preparation for a float, the company has announced this morning that executive chairman Bill Wavish will step down, although he will remain at the company for a further 12 months as a consultant.

“Bill has advised the board that he believes any potential re-listing would require an extended commitment and involvement beyond his initial commitment to the business and has decided to step down from his roles,” Myer said in a statement.

The company is now rocketing towards a sharemarket float.

“The ongoing trend of performance improvement across a range of business metrics and a continued strengthening of sales and profit performance in the fourth quarter, has encouraged the owners of Myer to begin a review process that may result in an IPO in the near-term, potentially this calendar year,” Myer told the ASX this morning.

A decision to list will be made by the chains owners, private equity firm TPG, the Myer family and Blum Capital.

The trick will be ensuring that the market conditions are strong enough to support a big float like Myer would be. Just eight companies listed on the ASX in the first six months of 2009, as jittery investors sold off stocks.

But a recent rally on the sharemarket and strong support for listed company capital raisings is being taken as a sign that investors are ready to open their wallets again.

Myer’s turnaround strategy (which has been described previously on SmartCompany) appears to be running on schedule.

The company is 39 months into the 50-month turnaround plan, but has already reached its goal of increasing its earnings to sales ratio to more than seven cents in the dollar, from below two cents in the dollar.

“We have also made significant progress on reducing costs, improving margins and driving stronger in-store performance and have made very substantial progress in the remaining turnaround projects,” Wavish said.

Howard McDonald has been appointed as non-executive chairman of Myer. The company says Wavish will continue to work on Myer’s store improvement program covering service, efficiency, presentation and rostering.