Department store Myer has pledged to reach within and invest in underperforming private brands as it meets a “challenging macroeconomic environment” in which profits have dropped more than a quarter.

The 124-year-old retailer’s 2023/24 results released on Friday show total profit after tax fell 26 per cent to $52.6 million from $71.1 million the previous year.

More than half the total loss was blamed on the “underperformance” of Myer-owned sass & bide, Marcs and David Lawrence, brands it had planned to sell but is now hoping to turn around.

While comparable sales growth on 2022/23 was up 0.4 per cent, total sales were down 2.9 per cent as a result of closing stores in Victoria and Queensland.

Operating gross profit fell 2.5 per cent, the cost of doing business increased 1.3 per cent to $834 million and net capital expenditure was $69.4 million.

Executive chair Olivia Wirth said the results reflected the challenging environment facing Australian retailers.

“Despite the tougher trading conditions, work undertaken by the Myer team in recent years has helped stabilise the business and established a foundation for future growth,” the former Qantas Loyalty CEO said.

Wirth said Myer was focused on turning around results to improve profitability, performance and shareholder returns.

“We have commenced a comprehensive strategic review to increase Myer’s profitability and drive sustainable earnings growth,” she said.

“Our objective is to identify opportunities to deliver a step-change in Myer’s market position and generate strategic and financial benefits.”

Myer-exclusive labels sass & bide, Marcs and David Lawrence were in the process of being sold but that has ceased as Myer begins a prioritisation of in-house brands as part of its refreshed strategy.

In June, Myer revealed intentions to acquire clothing brands Just Jeans, Jay Jays, Portmans, Jacqui E and Dotti from Premier Investments’ Apparel Brands.

If the deal goes through, Myer would take full ownership of the labels in exchange for new shares in Myer being provided to Premier shareholders.

The purchases would be a considerable boost to Myer’s earnings if accepted by Premier, as Apparel Brands is forecast to rake in $130 million in profit in the next financial year.

-AAP