Myer to push ahead with plans for Chinese website

Department store giant Myer says it will push on with plans to develop a Chinese-based website in order to avoid taxes and hopefully soften the impact of more dollars being sent to offshore online retailers.

But the company’s shock profit downgrade, announced yesterday, made no connection between the increasing number of transactions being made on websites based overseas and the fact its comparable store sales fell over 5% in the second half of 2010.

In the company’s half-yearly report, it said that “we are progressing well in establishing our global sourcing offices in Shanghai and Hong Kong, including our new Hong Kong-based internet site and fulfilment facilities”.

It added these new operations will “strengthen our direct sourcing capabilities”.

However, the company also neglected to mention whether it had recorded an increase in online sales – despite JB Hi-Fi and Woolworths both announcing in their reports they had recorded a substantial boost in eCommerce during the last half of 2010.

A Myer spokesperson told SmartCompany this morning the plan is still to have the new site up and running by the end of the month.

The lack of details regarding both issues is odd given Brookes and the company were both adamant about pursuing a strategy for dealing with the amount of money being spent on websites based offshore.

The silence also comes as the Retail Coalition has seemed to have backed down during the past few weeks regarding the plan to slap a GST on online sales. The members were said to have planned a conference call in mid-January but were reportedly delayed due to the floods.

Brookes made the comments about a Chinese site last year after online retail suddenly became a thorn in the side of several large department stores, including Myer, David Jones and Harvey Norman – all of which had publically avoided moving online until very recently.

”If we can’t beat them, we’ll join them,” Brookes said at a business lunch in December. “We just want a level playing field. We will take jobs offshore and we will ship product out of China through our internet site, it’s a bloody shame.”

At the time, Brookes said that the site would ship products from China using the Chinese and Australian postal services.

Gerry Harvey even said he would consider setting up a similar store, adding that, “We may even beat Myer to getting our shop up”.

Given that Brookes and Harvey poured so much effort into their campaigns against online sales, it is curious that Myer’s half-yearly results, (which were disappointing on their own), made only one mention of the site at the end of the report.

The company also mentioned that it had redesigned its website and that it will soon be updating it with new navigation features and better functionality.

Myer’s shares plummeted over 12% yesterday after it said comparable store sales were down over 5% for the second half of 2010.