Signs for one of Australia's Myer Holdings Ltd's retail stores is seen on the outside of the building in central Sydney, Australia, February 19, 2018. REUTERS/David Gray

MELBOURNE (Reuters) - Australia’s largest department store operator Myer will stop selling “unprofitable” Apple Inc products as part of its drive to focus on higher-margin items, Myer Holdings said on Friday.

Apple Inc is facing weak demand for its iPhone, which has come under fire for being too expensive. Demand has notably fallen in the world’s biggest smartphone market China, partly as a result of the trade dispute with the United States.

The decision, which will apply to the 16 department stores that stocked Apple products as well as online sales, comes as the department store operator restructures to better compete with online retailers.

Myer, which was founded on the back of the country’s gold rush more than a century ago, is cutting costs and boosting its online presence which allowed it to swing into a modest first half profit in January.

“Myer has made it clear that it will not chase unprofitable sales and has made this decision as we could not reach acceptable commercial terms that were in the best interests of the company and shareholders,” a spokesman said in an emailed comment to Reuters.

“This decision is also about ensuring space in our stores is utilized in the most productive and effective way for the company. We thank Apple for the positive partnership we have had over many years.”

Myer’s net profit came in at A$38.4 million ($27.20 million) for the six months to Jan. 26, compared to a loss of A$476.2 million for the same period a year earlier.

Myer has 61 stores, mostly across the eastern part of the country. Stores are usually in areas of high foot traffic in major metropolitan shopping centers as well as in city centers.