David Jones Sales Slump 4.6%, CEO Admits ‘Challenges’

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Even Miranda Kerr couldn’t save DJ sales

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Full year sales for the high end retailer slipped 4.6% and like-for-like sales dipped 4.3% in 2012 trading year, compared to FY11.

David Jones’ sales slump continued in its most recent fourth quarter falling 1.3% to $455.8 million (29 April-28 July 2012), however this marked a lesser decline than the FY result, noted said CEO Paul Zahra.

“Whilst trading conditions continued to be challenging throughout the quarter we did see a continued improvement in our sales tracking, with sales in 4Q12 down 1.3%,” said Zahra.

DJs also reaffirmed its downwards profit guidance of 35% – 40% for the 2012 financial year.

But Mr Zahra insisted “we are making good progress in implementing our Future Strategic Direction Plan.”

DJs’ ‘Home and Electrical’ categories continued to be “challenging” while the best performing categories in 4Q were Womenswear, Menswear, Beauty and Accessories.

The best performing states in the quarter were Victoria, the ACT and Western Australia, while performance in Queensland was adversely impacted by the Toowong Village store refurbishment. The department store also commenced the refurbishment of its Sydney Elizabeth Street store in July.

 

The Company said it has addressed the excess inventory issue it faced in FY12 and is “well positioned” with new inventory for FY13.

David Jones decreased the duration of its Winter Clearance by two weeks during Q4 which Zahra said ” is consistent with our strategy to reduce the length of our discount events and to focus on new inventory.”

Whilst admitting the trading environment remains “challenging,” Zahra sung off his retailers positives including:
a strong business model, clear business strategy, strong balance sheet, good cashflows, ownership of Sydney and Melbourne CBD stores and the best national and international brand portfolio in Australia.

The retailer will release its full year results in September.

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