Little more than a week after Myer announced it was leaving Brisbane’s CBD, the department store chain has now said it could ditch another city centre location.
Myer has dramatically threatened to close its Adelaide store within the Myer Centre on the busy Rundle Mall.
The Melbourne based company has claimed the CBD shopping centre which bears its name is “substantially empty” of other stores surrounding Myer and as such its lease has been breached.
The revelation didn’t come from Myer itself but from the shopping centre’s landlord. It has responded saying Myer’s claims are “ill founded” and it will challenge them.
The Myer store in Adelaide’s CBD Myer Centre. Picture: Dean Martin/Newswire
The Myer Centre Adelaide opened in 1991 and has featured its namesake anchor retailer ever since. It’s reported more than 200,000 people – one fifth of Adelaide’s then population – visited the centre on opening day. It once featured a theme park called Dazzleland with a roller coaster that looped around the top floors.
It’s now a different story for the ageing centre.
While major retailers like Uniqlo inhabit the floors near street level, the upper levels have seen empty storefronts.
“Myer alleges that there has been a breach of the lease (which currently runs until June 2032), claims unspecified damages and seeks a declaration that Myer is entitled to terminate the lease,” the landlords, Singaporean firm YTL Starhill Global REIT Management, said in a statement.
“Myer alleges that the landlord has breached, and is continuing to breach, the lease by maintaining the Myer Centre Adelaide in a condition whereby it is substantially empty of suitably presented retail stores.”
Myer has said its lease has been breached by the Myer Centre’s owners. (AAP Image/MATT LOXTON)
Myer’s claims ‘ill founded’
The firm said Myer’s claims were “ill founded” and it would “vigorously defend” itself.
The first steps are an arbitration process, YTL Starhill said, which was expected to take at least 12 months unless an agreement or settlement is reached beforehand with Myer.
During this time Myer will continue to occupy the centre and pay rent as usual.
Myer occupies 52 per cent of the Myer Centre and pays a rent of $13.7 million a year, 9 per cent of YTL Starhill’s net property income in 2022.
Uniqlo is a positive recent addition to Adelaide’s Myer Centre but much of the rest of the mall has less well known names. Picture: Keryn Stevens
“Adelaide customers don’t want to see Myer exit the Rundle Mall,” said QUT Business School marketing professor Gary Mortimer.
“Ultimately (Myer) will be looking for a positive outcome where the landlord steps up, they bring in newer retailers, refurbish the centre and it’s a win-win,” he told Channel 7.
Empty shops in the Myer Centre, Rundle Mall. Picture: Brenton Edwards
Adelaide threat has echoes of Brisbane closure
Myer’s threat to leave Adelaide’s CBD has similarities to its decision earlier in March to close its Brisbane CBD store – even down to the two stores being in identically named centres.
The company told landlord Vicinity Centres that it would be leaving the Brisbane Myer Centre at the end of its lease this July.
Myer CEO John King stated that the store was unable to negotiate a reasonable commercial outcome with Vicinity.
Like in Adelaide, the Brisbane mall has also suffered from a number of empty stores.
Adelaide’s Myer Centre used to feature an indoor roller coaster.
The closure announcement comes after Myer announced a super-sized profit on record half-yearly sales growth of 24 per cent.
Myer said it was exploring options for an alternative Brisbane CBD site and would provide redeployment options within the business and surrounding stores for its team members where possible.
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Days later, Griffith University announced it could move into the shuttered store as a “stop gap” as it is on the search for new space to expand.
News.com.au contacted Myer for comment.
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