Continues growth under new ownership.
David Jones sales have grown by 8.4% on a 52-week comparable basis, while sales in comparable stores grew by 7%. Gross profit margin declined by 1.7%, impacted by the late winter markdown, lower intake margin on the weakness of the Australian dollar and inclusion of the clearance month of July in 2016.
Costs were well controlled and in line with sales growth, notwithstanding the once-off costs associated with the launch of private label and other transformation projects. Full year profit before tax was $168 million, which increases to $202 million taking into account profit earned by the other Group segments from the David Jones channel.
David Jones is growing its footprint in the Australasian market, and in July 2016 opened the first David Jones store outside of Australia, in Wellington, New Zealand. The company also recently announced the $360 million sale of the Market Street property in Sydney, and its intention to invest up to $200 million to develop its adjacent Elizabeth Street building. The redevelopment is expected to be completed in the second half of 2019.
The David Jones head office will be relocated to Melbourne and consolidated onto a new campus with Country Road Group. The company has worked closely with both the Victorian state government and the new campus property owners to structure a range of incentives to offset the cost of the relocation, with expected synergies and productivity benefits of at least $10 million per annum from 2019.
A company statement read: “Looking to the year ahead, the Australian trading environment continues to be tough. Nonetheless, our mid-to-upper income customers are resilient and our combined Group presence continues to present us with opportunities to grow market share and drive profitability in both sub-Saharan Africa and Australasia.
“We are confident that our strategies are clear and our businesses are well-positioned despite the prevailing conditions. Our transformation of David Jones continues to go well and we are on track to deliver the benefits we set out at acquisition.”