(Repeats to fix technical glitch)
* Myer Q1 sales slip 2.8 pct
* Cuts three-year sales growth target to 10 pct from 20 pct
* Shares hit 5-wk low
By Tom Westbrook
SYDNEY, Nov 1 (Reuters) - Australia's biggest department store chain, Myer Holdings Ltd MYR.AX , cut its growth targets on Wednesday as it battles intensifying competition and a rebellion from its biggest shareholder, sending its share price sharply lower.
Once a dominant force in retailing, Myer's business model has buckled under pressure from new foreign rivals at a time of lacklustre consumer spending and flat wage growth, sparking market speculation it could be ripe for a takeover.
The company on Wednesday again blamed "challenging retail conditions" and competition for the drop in sales, and halved its three-year target for growth in sales per square metre to 10 percent.
Total sales for the 13 weeks to Oct. 28 fell 2.8 percent to A$699 million ($535.1 million), it said. On a comparable store basis, sales fell 2.1 percent.
"I only see weeds, no green shoots," major shareholder Solomon Lew said in a statement as the company's stock dropped as much as 5.2 percent in its biggest intraday fall in more than three months.
Myer shares had jumped on takeover speculation when Lew, a fashion-industry veteran with a track record of corporate raiding, first purchased his 10.8 percent stake in March. Lew holds the stake via Myer rival and supplier Premier Investments Ltd PMV.AX , which he chairs.
Now the stock is trading close to an all-time low as the company struggles with competition from new bricks-and-mortar "fast fashion" retailers such as H & M Hennes & Mauritz HMb.ST , as well as online rivals like Amazon.com AMZN.O which has flagged an Australian expansion.
The weak first-quarter sales figures heap pressure on the board to make good on a turnaround strategy dubbed "New Myer", involving closing stories and ramping up online sales.
Online sales leapt 68 percent, but with overall sales to what the company calls "omni-channel customers" only A$48.4 million for the quarter, it remains only a small fraction of the retailer's revenue.
"The strategy has to be to regain the trust of buyers and it seems that Myer isn't really going to realise that ... it's not getting the rise in volumes you'd expect from cutting price," said Ric Spooner, Chief Market Strategist at brokerage CMC Markets.
Lew says he has no "current" takeover plans but has pressed the company for board seats, demands Myer has rejected. hit back at Lew in a letter to shareholders this week, saying it would be "enormously damaging" to allow a competitor to have seats on the board.
($1 = 1.3063 Australian dollars)