Coles Myer (1986–2006)
By the 1980s, Coles primarily operated supermarkets, whilst Myer operated the department store chains Myer and Grace Bros, as well as the Target discount variety store chain in Australia, and fast food restaurant chain Red Rooster (which it acquired in 1981).[14] Both Coles and Myer grew throughout Australia through growth and acquisitions, and both independently listed on the Australian Securities Exchange. In August 1985, the Myer Emporium Ltd and GJ Coles & Coy Ltd merged,[15] becoming the largest ever Australian Corporation.[16] The official name change to "Coles Myer Limited" followed in January 1986. The U.S. Kmart Corporation continued to hold shareholding in the merged company until Kmart sold its 21.5% stake in November 1994.[12]
A new head office opened in 1987 at Hawthorn East, Melbourne. As of 2022, it remained the head office for Coles Group and associated subsidiaries.
In September 1993, Coles Myer signed a licence agreement with Brinker International for the Chili's Texas Grill restaurant chain. It opened the first Chili's restaurant in August 1994 in Sydney with plans to open up to 50 locations across Australia.[17] A second Chili's opened in February 1995.[18] Five months later, despite the success of the restaurants, Coles Myer decided to cancel the roll-out to focus on its core businesses.[17] It sold the Chili's licence and two existing restaurants to Red Hot Concepts in late 1995.[18][19]
The merger of Myer Emporium Ltd had included the Fosseys variety discount chain. The previously competing brands of Fosseys and Coles Variety Stores became an integrated entity soon after the merge,[20] but by 1994, they were still using the Fosseys brand for country stores and Coles Variety stores in city/suburban areas.[21] Soon after, the Coles Variety Store brand was retired, and all stores converted or closed.
Bi-Lo was acquired by Coles Myer in 1987.[22] It was a major supermarket chain and continued to be owned and operated by Coles Myer in parallel to Coles Supermarkets. Bi-Lo was rebranded to Coles from 2007, the last store rebranded in 2017.
The office stationery chain Officeworks, based on the US chain Office Depot, was established in 1993 with the first store opening in the Melbourne suburb of Richmond in June 1994. This represented a successful introduction of a "category killer" – by comparison, around the same time Coles unsuccessfully attempted to negate the arrival of Toys "R" Us with the short-lived chain World 4 Kids.
In 1996, the operations of Target and Fosseys (earlier "Coles-Fossey") merged and the first Baby Target speciality store was opened, followed in 1998 by Target Home. In 1999, regional Fosseys stores were re-badged as Target Country, with metropolitan stores closed. Following Target's operating loss of $43m in 2001, the chain's format was repositioned to compete less with Kmart, Woolworths's Big W, Harris Scarfe and The Warehouse, and more with Myer, with a focus on "middle class" quality products, especially clothing and home wares.
In 1998, Coles Myer opened the first Megamart store, a furniture and electrical goods retailer.[23] Harris Technology, a computer hardware and software reseller started by Ron Harris in 1986, was acquired in 1999.
By 2001, there were three Megamart stores and Coles Myer planned to expand the chain,[24] but by 2005 had decided to divest the struggling business. Six of the nine stores were sold to competitor Harvey Norman, with the remainder closed.[25]
In 2001, the company appointed John Fletcher, formerly of Brambles, as chief executive. Fletcher engineered a brief turnaround in the company's fortunes. Fletcher abolished the shareholder discount card, on the basis that it had eroded margins while providing little benefit, and was unpopular with institutional investors. Since their introduction in the early 1990s, the card had induced a tenfold increase in the number of Coles Myer's shareholders, with the overwhelming majority owning only small parcels of shares.
Fletcher also engineered the acquisition of the retail fuel operations of Shell Australia with the fuel outlets rebranded as Coles Express, allowing Coles Group to counter the success of Woolworths' discount petrol operation. Woolworths subsequently gained entry to part of Caltex Australia's network to provide a recognised brand for its fuel offer.
In 2002, Coles Myer sold Red Rooster to Western Australian company Australian Fast Foods.[26]
