Myer has unveiled a $476 million half-year loss, announcing a $515 million impairment on the carrying value of its goodwill and brand name on Wednesday morning.

The embattled department store chain, which had previously advised the market that it would be incurring a write-down on the value of its business amid a continuation in difficult trading conditions, has slashed $465 million from its goodwill and $50.3 million from its brand name.

It comes after rival chain David Jones, owned by South African-based Woolworths Holdings, incurred a $712 million write-down earlier this year.

Excluding $9.7 million in implementation costs and the write down, Myer booked a 36 per cent decline in its net profit after tax to $40.1 million, which was at the higher end of the guidance it provided in February.

Sales declined by 3.6 per cent to $1.71 billion, while comparable sales decreased by 3 per cent.

Top line performance worsened in the second quarter, down 3.6 per cent on a comparable basis; compared to a 2.1 per cent decline in Q1.

Myer’s cost of doing business was relatively flat, decreasing by .3 per cent to $537.1 million, although operating gross profit margins declined by 73 basis points to 37.53 per cent.

The department store provided no specific second-half guidance, but said that sales have improved in the first seven weeks of the second-half, following investments in price.

Questions are now mounting over whether Myer’s sales slide may now be at risk of breaching lenders’ conditions either in the second-half fiscal 18 or in FY19.

Myer said on Wednesday morning that it has commenced “orderly refinancing” to secure its future debt requirements after an existing facility expires in August 2019.

“We firmly believe there’s sufficient headroom to see us through to our next refinancing,” chief financial officer Nigel Chadwick said, stating that Myer is within all its financing covenants.

UBS analysts said concerns over a possible covenant breach have intensified in the wake of the result this morning.

“[second half year-to-date] trading improvement is positive but at the expense of margin, with no mention of medium-term targets. Covenant breach concerns intensify, particularly from the $515m impairment, albeit within [covenants] as at first-half 18,” UBS analyst Ben Gilbert said.

No mention of New Myer strategy in release

Myer’s executive chairman Garry Hounsell, who stepped in to lead the business after former chief executive Richard Umbers was shown the door in February, said the result was “unsatisfactory” and reflected a “failure to respond appropriately to the heightened competitive environment prior to Christmas.”

“The execution of strategic initiatives could have been better managed, for example, some elements of the strategy, which targeted a new high value customer were rolled out too quickly and didn’t balance enough attention on Myer’s traditional customer base, adversely impacting profitability,” he said.

Hounsell told investors, analysts and media on Wednesday morning that he’s been pushing the Myer team to “trade the business more aggressively” since starting, and is in active discussions with landlords on reducing overall occupancy costs.

“We’re trying to negotiate various things with [our landlords], we look at the whole portfolio … I have a series of meetings coming up in the next few weeks,” Hounsell said.

Myer’s store closure plans are currently under review, but Hounsell said it would ultimately a matter for Myer’s new CEO.

Myer has kicked off a renewed focus on product, price and customer service in his first month leading the day-to-day operations of the business, outlining an expectation that his plan will “re-engage” Myer’s traditional customer base.

Hounsell said that the New Myer strategy, which has characterised the department store’s turnaround for several years, was sound, despite the fact that the term New Myer was not mentioned once in its ASX release this morning.

“We moved into areas of the New Myer strategy too quickly … we’re now re-looking at that,” Hounsell said.

“The strategy and the new strategy is for the new CEO, its not my job I’m in a caretaker role and that’s … purely to drive profitability for our shareholders,” he later said.

“I might not be one of the world’s great retailers, but I know how  to make money. ”

Hounsell said he’s “elevated” Myer’s focus on exclusive brands across all categories and the business will increasingly focus on setting itself apart from competitors in coming months.

“You will hear the term only at Myer more,” he said. “Our customers will know that our range is unique, different, compelling and only available at Myer.”

Myer will also be increasing its focus on staff training to address concerns about the level of service being provided in its stores, as well as adjusting its pricing strategy to to reflect its renewed focus on value.

“Myer must regain its historic reputation for great value and customer service, the work on value is progressing well and with the right training, together with appropriate incentives and supported by technology, our team members can deliver on our service aims,” Hounsell said in a statement.

Online will also be a continued target for investment, after becoming Myer’s third biggest store during the half with 48..9 per cent sales growth to $105.2 million.

On Myer’s search for a new CEO, the department store today revealed that interviews have already taken place with a range of “high calibre” candidates.

“We already have a strong list of candidates … I will make an announcement on this at the appropriate time,” Hounsell said.