Myer’s $48 Million Warehouse Nightmare: How a Botched Logistics Project Sent Share Price Plummeting and Put Pressure on Executive Chairwoman
- Myer’s state-of-the-art national distribution centre in Melbourne has been plagued by operational issues, costing the company at least $48 million in lost earnings.
- The warehouse, which was supposed to be a tech-forward hub featuring 200 autonomous mobile robots, has been unable to operate as designed, forcing the company to manually bypass the system and fulfil online orders directly out of local stores.
- The problems have led to a 75 per cent collapse in Myer’s share price from its peak at the end of 2024, with a 29 per cent drop in just a matter of hours after the company revealed the true extent of the issues.
- The company’s executive chairwoman, Olivia Wirth, is under pressure to turn things around, with the departure of the chief supply chain officer brought in to fix the mess adding to the scrutiny.
The woes of Myer’s national distribution centre (NDC) in Ravenhall, Melbourne’s west, are a stark reminder of the challenges facing Australia’s retail giants in the era of online shopping.
The company’s attempts to stay competitive with the likes of Amazon have been dealt a significant blow, with the NDC’s operational issues costing at least $48 million in lost earnings so far.
The problems began shortly after the facility went live in August 2024, with severe integration issues between the software systems and the hardware robotics causing stock from Myer’s Exclusive Brands to become “trapped” in the automated system.
This meant that the company was unable to use the stock to fulfil online orders, forcing it to manually bypass the system and use local stores instead.
Despite the company’s efforts to rectify the situation, the problems have continued to snowball.
In September, Myer revealed that the total cost to fix the botched rollout had ballooned by an extra $16 million to $32 million, and that the site wouldn’t be ready for Christmas 2025.
The company was forced to emergency-outsource its logistics to Toll Transport, a move that saw its share price tank 29 per cent in just a matter of hours.
The issues at the NDC have put pressure on Myer’s executive chairwoman, Olivia Wirth, who was brought in to turn the company around. Wirth, who was appointed in June 2024, has seen the company’s share price more than halve to 30c during her tenure.
The departure of chief supply chain officer Darren Wedding, who was brought in to fix the mess, has added to the scrutiny.
Analysis: What This Means for Australia
The struggles of Myer’s NDC are a symptom of a broader issue facing Australia’s retail sector. The rise of online shopping has forced companies to adapt, but the transition has not been smooth.
The pressure on retailers to keep up with changing consumer habits has led to a number of high-profile closures, including the beloved Australian school shoe brand, Betts.
Security analysts say that the issues at Myer’s NDC highlight the importance of getting logistics right in the era of online shopping.
“The fact that Myer’s NDC has been plagued by operational issues is a stark reminder of the challenges facing retailers in this space,” said one analyst.
“Companies need to invest in the right technology and infrastructure to stay competitive, but they also need to make sure that they have the right people and processes in place to manage it.”
Law enforcement insiders warn that the rise of online shopping has also created new opportunities for cybercrime and other forms of exploitation. “As more and more people shop online, there is a growing risk of cybercrime and other forms of exploitation,” said one insider.
“Companies need to be aware of these risks and take steps to protect themselves and their customers.”
Industry observers believe that the struggles of Myer’s NDC are a wake-up call for the retail sector.
“The fact that Myer’s NDC has been plagued by operational issues is a reminder that the transition to online shopping is not always easy,” said one observer.
“Companies need to be prepared to invest in the right technology and infrastructure, and to adapt to changing consumer habits.”
As Myer continues to grapple with the issues at its NDC, the company’s executive chairwoman, Olivia Wirth, will be under pressure to turn things around. With the departure of chief supply chain officer Darren Wedding, Wirth will need to find a new solution to the company’s logistics woes.
One thing is certain: the future of Myer, and the Australian retail sector as a whole, depends on it.
