Jobs go as Australian retailers restructure


Australia's biggest retailer is looking to improve operational efficiencies

By CNN's Grant Holloway

MELBOURNE, Australia (CNN) -- Australia's retail sector took a double hit Tuesday as two major department store operations restructured their businesses, shedding more than 2,000 staff in the process.

Citing the need to improve operational efficiency, Australia's biggest retailer Coles Myer, made about 1,000 mainly low-level management employees redundant in its general merchandise and apparel division.

And Japanese department store chain Daimaru is quitting its Australian operations altogether, closing its Melbourne and Gold Coast outlets, also at a cost of more than 1,000 jobs.

Coles Myer, Australia's biggest single non-government employer, flagged further job cuts were likely as it rolled out its "Operation Right Now" restructuring program throughout the rest of its businesses.

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Coles employs around 167,000 people and has more than 2,000 stores throughout Australia and New Zealand generating sales last financial year of over $12 billion (Aust. $23.7 billion).

New Coles chief executive officer John Fletcher said however, that Coles remained confident of the future and said new store openings by the group over the next year could create as many jobs as were being lost now.

Fletcher would not reveal how much the Right Now program would benefit Coles' bottom line, but did say the company was making a provision of about $15 million to cover mainly redundancy costs.

"A long-term strategy review will build on the work now underway and we expect to outline the results of that review during the first quarter of of calender year 2002," Fletcher said in a statement.

Coles shares were marked down A3c to A$7.10 in late trading on the Australian Stock Exchange Tuesday.

No foreseeable improvement

Daimaru Australia, a joint venture between Kumagai Gumi and Daimaru Inc, said Tuesday that the withdrawal was inevitable given the losses the business had suffered in the 10 years since it had set up in Australia.

Daimaru's Gold Coast, Queensland store will be closed this coming January, while the much larger Melbourne, Victoria, outlet will shut its doors in July next year.

"In the board's opinion, the operations are no longer commercially viable as both stores have been trading poorly for a considerable time with no reasonable prospect for a turnaround in the foreseeable future," Daimaru Australia managing director Koichi Murata said.