Australian retail giant Coles Myer yesterday started to shed around 1,000 staff from its Myer Grace Bros, Kmart, Target, Officeworks and Megamart divisions as part of a $32.1 million restructuring programme.

CEO John Fletcher said the jobs would be axed in the first stage of a major business-wide shake-up across the company's merchandising and apparel group. 'Operation Right Now', as the initiative is termed, will generate cost savings of at least $90 million a year for general merchandise and apparel (GM&A) by the end of 2004.

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Coles Myer Ltd

"There are immediate opportunities to improve the company through greater operational efficiencies across all of the Coles Myer group," he explained. "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 calendar year 2002."

The Melbourne-based retailer has made three profit warnings this year, and Mr Fletcher added that the underlying performance of GM&A brands must be improved before any decision is made. Changes will focus on eliminating duplications in supply chain management, merchandise systems, processes and operational structures.

About 30 per cent of GM&A head office support staff will be shed.

Martin Foley, spokesman for the Australian Services Union (ASU), claimed Coles Myer had hired security staff to escort sacked staff off the premises.

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