First music, but could DJ also dump TVs?
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Television categories will be under review admitted DJ’s Ceo Paul Zahra yesterday, after the high end retailer already confirmed it would be ditching music, DVD and games from its stores.
“TVs are under review obviously, but we are not existing the category” a David Jones spokesperson told CN.
All Home categories, including furniture, white goods and AV, are going to be reduced, but DJs could possibly reduce the TV category even further in the future, the spokesperson said.
Yesterday, David Jones said Q2 ’13 sales fell 1.4% to $590.1 m compared to same quarter 2012 fiscal year.
Second quarter sales (28 Oct- 26 Jan) were “adversely affected” by home categories and “in particular” consumer electronics which fell in the quarter and in the half year, although Fashion and Beauty grew.
Sales for half year H1 2013 also slumped 0.7% to $1.0bn.
CEO Zahra blamed everything from the forthcoming September general election to international e-tailers and poor demand for electronics for the weak sales growth in the crucial trading period which includes Christmas.
“The fashion and beauty business is doing very well and is actually in good shape and we are dragged down by the home categories, particular in electronics, which would include TV,” he said yesterday.
Electronics continued to be “challenging and subject to ongoing deflationary pressure,” the high end retailer complained, something which all the big electronics retailers like Dick Smith and Harvey Norman have all echoed, although JB Hi Fi, who announced a sales jump of 3% this week, said this price pressure was easing.
A DJ spokesperson told CN yesterday they are currently looking at allocating even more space to more profitable categories, such as Beauty and Fashion and less on Home products.
David Jones has already increased the amount of store space dedicated to Fashion and Beauty to 65% and has slashed Home categories to 35% (from 45%).
And DJs could slash Home categories even lower in the future to 75:25 in favour of Fashion and Beauty, a spokesperson added.
Sony could be a major casualty of this category review as DJs stocks an extensive range of its electronics gear, along with Apple and Belkin, as well as white goods brands like Breville and Delonghi.
However, it would take a while to execute this, as the stores would require refurbishment, which could “take years.”
When asked about the reason for the electronics slump, the company rep said: “These categories aren’t doing well in the market in general”.
Retail boss Zahra also blamed international websites for the slump in November sales and said he believed consumer sentiment was still weak, and the high Australian dollar had also hit trading, and even blamed the uncertainty associated with the Federal election
“It would be fair to say the federal election that’s planned for September adds to uncertainty and that can’t be good for consumers,” he said, according to AAP.
Shares fell -0.19% to $2.66 on the ASX today, and slipped -2.24% yesterday after Q2 earnings call.
