Business stories from the past week, compiled by Jason Maywald:
1. News.com.au: Myer’s desperate fight for survival
Make no mistake, there is so much red over Myer’s accounts it’s a financial bloodbath. What the Melbourne-based grand dame of Australian retail does next could have massive implications for the entire department store sector, as well as how much you pay for a pair of jeans.
But a retail expert has said we shouldn’t write Myer off just yet. While it may have “waved the white flag” in its battle with long-time rival David Jones, Myer’s desperate struggle for survival may lead to the death of another wounded retailer — Target.
Drastic plans are in the works to lift Myer out of the shopping doldrums with the company already flagging a possible price war.
2. SMH.com.au: Heat on Big Four as new bank launches with SME focus
The big four banks are facing competition in the small business sector with the launch of Judo Capital, which is planning to tap into a $60 billion shortfall in lending to SMEs.
The SME focused challenger is on track to raise over $100 million and has applied to become a full bank under the Australian Prudential Regulation Authority’s regulatory framework.
Judo is co-founded by the former head of National Australia’s business bank, Joseph Healy, and NAB alumni David Hornery.
It is looking to tap into demand for lending in the market that is not being met, with a Macquarie bank 2015 report identifying a shortfall of $60 billion for the SME segment.
3. News.com.au: Why doesn’t anyone want Coles?
Supermarket giant Coles will be dumped by its parent company in a shock move that leaves it facing a very uncertain future without the backing of its enormous corporate parent.
The conglomerate Wesfarmers — which is Australia’s largest company in terms of revenue — announced on Friday it was done with Coles and, after getting the necessary approvals, would spin it off into a separate company.
Wesfarmers made it clear the performance potential of the huge supermarket chain was not good enough for them to continue owning it.
“Wesfarmers will measure its success over the next decade based on the returns that we generate, not the size of our portfolio,” said Wesfarmers managing director Rob Scott on Friday. “While Coles still has many opportunities to grow … its earnings can now be expected to grow at a more moderate rate.”
4. Dailytelegraph.com.au: Young Australians facing a bleak financial future due to Superannuation rorts
Young Australians are woefully unprepared for retirement, slugged fees that are too high in superannuation funds that are too risky and – in some cases – being fleeced of their contributions by dodgy employers.
It could cost them hundreds of thousands of dollars in lost cash that is rightfully theirs.
That’s the conclusion of an investigation by the ABC’s Four Corners that found the so-called gig economy (which has seen Uber and food delivery companies like Deliveroo thrive) is leading to an economic ticking time bomb.
5. Dailytelegraph.com.au: Toys ‘R’ Us founder dies
Charles P. Lazarus, the World War II veteran who founded Toys R Us six decades ago and transformed it into an iconic piece of Americana, died Thursday at age 94, a week after the chain announced it was going out of business.
Toys R Us confirmed Lazarus’ death in a statement.
“There have been many sad moments for Toys R Us in recent weeks, and none more heartbreaking than today’s news about the passing of our beloved founder, Charles Lazarus,” the company said. “Our thoughts and prayers are with Charles’ family and loved ones.”