Myer makes Brisbane CBD exit as mall woes hit
Myer chief executive John King said it was ‘exploring’ future CBD options in Brisbane. Picture: NCA NewsWire / Dan Peled
THE exit of department store Myer from its longstanding Queen Street Mall location in the heart of Brisbane is a sign that retail landlords face tough times in dealing with tenants.
Both the listed Myer and the private equity-controlled David Jones have flagged extensive rationalisation of their store networks, but the planned closure in a landmark city location surprised industry players.
Myer was the main retailer of its namesake Myer Centre since 1988 – when it opened ahead of Brisbane’s World Expo – and leaving the site could raise questions about other city malls.
Landlords have been working with department stores to shrink their oversized footprints and bring more productive tenants into the spaces they leave behind.
The move comes despite Myer’s post-pandemic recovery and may reflect a more conservative stance on the economy as interest rate hikes bite into consumer spending.
The Myer Centre food court. Picture: David Clark
In a statement, Myer said it was “unable to renew its lease” in the current Brisbane CBD location in Queen Street Mall and would “continue to search for alternative locations”.
“Whilst Myer remains committed to having a presence in the Brisbane CBD, it has not been able to reach appropriate and reasonable commercial terms with the current landlord, which will see the current store cease trading at the end of July,” the retailer said.
Myer has sites at Indooroopilly, Chermside, Carindale and Mount Gravatt.
The chain has yet to reveal the scale of job cuts, but said that it would look to redeploy staff where it could. “Whilst we remain committed to the Brisbane market, we have been unable to negotiate a reasonable commercial outcome with the landlord and as such will continue to look for an alternative CBD location,” Myer chief executive John King said. “We thank our team members for their service and will be providing redeployment opportunities at nearby stores,” he said.
Landlords Vicinity Centres and ISPT said in a statement that Myer had made the decision to depart the Myer Centre Brisbane at the end of its lease in July.
“Vicinity and ISPT were investigating a number of options for the centre, including a downsized contemporary department store and plans without a department store, which we can now progress with certainty,” they said.
Tenant-side retail leasing consultant Kyle Swain expressed concern on social media for the remaining tenants in the centre once Myer departed. Mr Swain said that retail tenants should be protected against such significant changes to market conditions.
Mr Swain warned that Myer’s departure would result in the financial failure of “numerous” other tenants in the centre.
He said they were not protected because landlords would not agree to protection or utilisation clauses that would provide financial relief to the tenant in such an unprecedented situation.
“The ‘market rent’ in the Myer Centre is most definitely tied to the foot traffic and prestige that Myer brings to the centre,” he said.
“It is also most certainly the basis for how the enormous rents for a tiny QSR kiosk, specialty retail stores and all other tenants in the building are justified,” Mr Swain said.
The landlords declined to comment on the specifics of Myer’s exit, but said they were optimistic about the centre’s future.
“We look forward to delivering a reimagined destination in the heart of Brisbane’s evolving CBD and anticipate sharing our plans shortly,” they said.
