It's the merger that was off, but is now back on, led by two chief executives that were supposed to quit but now look like staying. Welcome to the soap opera, or possibly the circus, that has captured Australia's two biggest department stores, Myer and David Jones, and the increasing likelihood they will be merged to form a $3.2 billion department store giant.
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The possible fusing of Myer, the nation's biggest department store, known for its midmarket demographics and appeal to average shoppers, and its historic rival, the upmarket David Jones, known for its well-heeled customers, is shaping up as the biggest story in corporate Australia.
Adding to the drama are the relentless and ominous threats by foreign retailers who, led by the likes of Spanish fast-fashion icon Zara, British store Topshop, H&M and a legion of online stores such as powerhouse ASOS, have snatched customers and sales from both Myer and David Jones.
Myer chairman Paul McClintock and CEO Bernie Brookes believe a merged entity can use its bulk to take on the overseas retailers and, perhaps, even expand some kind of as yet unspecified Myer-David Jones mishmash offshore.
The latest instalment came on Thursday, when in a shock announcement Myer announced that Mr Brookes, who has led the chain for eight years, would not step down as planned in August but would stay on to lead Myer in an open-ended employment contract that includes an 11.1 per cent rise in his fixed pay to $2 million.
As part of his reappointment, Myer intends to use Mr Brookes, considered one of the best retailers in the country, to spearhead a push to re-engage David Jones in merger talks and potentially to be the CEO of a united company.
David Jones has its own distractions and CEO issues to contend with, as well as fending off the merger overtures from Myer.
David Jones boss Paul Zahra announced his intention to resign in October, saying he was ''burnt out'' but it looks as if he might reverse that decision and stay at the David Jones helm.
Mr McClintock, a former head of federal cabinet's policy unit, reporting directly to then prime minister John Howard, was at pains to argue that after a merger Myer and DJs would retain their identities, fashion range, stores and management.
Retail analysts are sceptical about a union between the two chains, especially as they have very different customers, but they do agree there are massive savings to be made in back end and administration - as much as $90 million in the first year or two.
Now the pressure is all on the David Jones board. Mr McClntock released to the public a copy of a letter he sent to the David Jones chairman inviting him to sit down with him to discuss merger opportunities, and how the spoils could be shared among the two sets of shareholders.
Myer is offering an all-scrip merger that would not cede control to either side.
Ultimately, someone has to be the boss and weigh up the needs of both Myer and David Jones in a merged business - how those shots will be called is yet to be clear.
