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Myer boss expects tough times to continue

Business Spectator has reported on an interview with CEO of department store Myer (ASX: MYR) Mr Bernie Brookes. The interview, which aired over the weekend, raises concerns as to whether further interest rate cuts would actually have a stimulatory effect on consumers.

During the interview Mr Brookes stated that “consumers are not responding to lower interest rate cuts” which has led him to believe that the issues facing the retail sector are more structural than cyclical in nature. Mr Brookes also raised the alarm that it was “inevitable” that more retailers would collapse over the “coming months” and singled out high-end retailers with 10 to 20 stores as at particularly high risk.

For investors across the consumer discretionary sector it’s a troubling view to hear from one of Australia’s pre-eminent retailers. While other leading retailers such as David Jones (ASX: DJS) and upmarket retailer OrotonGroup (ASX: ORL) don’t fall directly into Brookes’ ‘at risk’ category, the lacklustre consumer environment continues to make life tough for all discretionary retailers.

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Motley Fool contributor Tim McArthur does not own shares in any company mentioned.

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