Australia's Myer raises cash for new strategy after profit falls

Australia's Myer Holdings Ltd said on Tuesday it would raise money from shareholders to cut debt and invest in its department stores after posting a 21 percent fall in full-year profit, its fifth straight year of earnings decline.

Myer, which has been grappling with tough competition, a shift to online shopping and a sluggish Australian economy, posted a net profit excluding one-offs of A$77.5 million ($55.1 million), in line with its March forecast and analysts' estimates.

The country's largest department store operator said it would raise about A$221 million through a rights issue priced at A$0.94, a hefty 22 percent discount to its closing price on Monday.

The funds would be put towards cutting Myer's A$388 million in net debt and a A$600 million, five-year strategy to reinvigorate sales as it battles a revival at rival David Jones, which was bought by South Africa's Woolworths Holdings Ltd last year.

"The New Myer strategy is built on providing a more focused and relevant merchandise offer to serve a more valuable customer and a better shopping experience for everyone who comes to our stores," said Chief Executive Officer Richard Umbers, who stepped into the role this year.

"The challenges facing the retail sector are well known, and we understand them deeply."

Myer said it expected current year net profit of A$64-A$72 million, excluding one-off costs of A$35-$45 million associated with the new sales strategy.

Shares in Myer have fallen about 14 percent this year, having hit an all-time low of A$1.165 in July.