When Country Road’s exclusive
agreement with Myer comes up for renewal this Friday, Crikey
understands Country Road will start looking at alternative retail deals
– which means David Jones.

While Country Road won’t be exiting
Myer, Crikey understands the exclusive deal is “not on the table any
more”. Apparently CR has long been unhappy with Myer’s handling of its
merchandise and the profitability of CR stock within the store.

But
this isn’t exactly breaking news. In 2004, when Solomon Lew’s
Australian Retail Investments – a substantial shareholder in CR –
issued a public “please explain” over CR profitability,
the relationship with Myer was cited as a prime concern. Specifically,
ARI was worried about excessive discounting of CR stock and “almost
continuous promotional activity in Myer stores”.

And when it
abandons the exclusivity deal, negotiations should be interesting – the
current Group General Manager Merchandise for Country Road, Derek
Muirhead, used to be GM Merchandise for Myer. Muirhead was one of many
who resigned during the Dawn Robertson regime.

It’s a rather
sombre end to a relationship that started so hopefully. Three years
ago, the two Australian icons entered into an exclusive arrangement to
create ten CR “destination Concept Stores” within Myer and increase the
CR range within Myer stores. As a result, CR stopped supplying David
Jones, which left the department store with a reported $20-25 million loss in sales.

“Country Road approached Myer Grace Bros because we offered a model that supported their business direction”, proclaimed then
Managing Director Dawn Robertson. “This is a real vote of confidence in
our strategy and our work to again become Australia’s Leading
Department Store.”