Coles Myer chief executive officer, John Fletcher, said in this morning's 2002 financial results announcement e.colesmyer - the company's Internet shopping business - would "in future be known as Emerging Businesses" and re-emphasised the unit's role as a test-bed whose successful ideas would be assimilated into relevant brands.
The announcement comes just weeks after upmarket retailer David Jones recorded a disappointing performance in its online operations, a result which contributed to a highly-publicised top-level executive shakeup. David Jones also said its online business was being integrated into the core operations of the group.
e.colesmyer, Coles Myer's fifth business division, recorded an earnings before interest and tax loss of $AU14.8 million for the 2002 financial year, down from AU$27 million the previous year. The company attributed the reduced loss to "increasing cost efficiencies" and the sale of the Myer Direct operation in January this year.
The losses came, however, against a backdrop of a 134.6 per cent rise in net profit for the financial year to AU$353.8 million.
Excluding Myer Direct, e.colesmyer's sales rose 28.3 per cent for the financial year, with Harris Technology and Coles Online providing the greatest contributions to sales growth, the company said.
Fletcher said the unit was delivering "valuable lessons in the development of new business channels, technologies and ideas.
"Once these direct selling concepts are proven, they will be assimilated into the brands as appropriate.
"For example, following the successful development of Officeworks Direct under e.colesmyer, the business is now operating within the Officeworks brand".
Fletcher said "while the performance of the underlying businesses continue to improve, it is anticipated that costs will increase in FY2003 as financial services opportunities are further developed".
Both of them sucked and that is why they didn't do so well.