By Chris Nicholls
SYDNEY: David Jones has unveiled its roadmap for the next five years, revealing it plans to open between four to eight new stores before 2012, and refurbish 11 to 14 of its existing high-value stores.
The release to the ASX today stated the company hoped to generate at least $5 million in contributions from each of the new stores by their second year of trading – broadly equivalent to over $40 million in sales overall.
The new stores will be in high-value demographics with large catchment areas. DJ’s have nominated Doncaster, in Melbourne’s east, Claremont, in Perth, and up to eight more stores, which are either in final lease negotiations or in active negotiations.
The Doncaster store will open in the first half of 2009, while the Claremont location will replace an existing store. However, the other stores will be in undisclosed new locations and are due to open in either FY11 or FY12.
Refurbishment of the current stores will mean greater floorspace for high margin brands and categories, part of the chain’s plans to increase gross margins to 39.5 to 40 per cent each year from FY09 to FY12.
Stores to be refurbished include the company’s flagship Sydney Elizabeth Street store, their Sydney Market Street store, Bondi Junction, Robina and the Bourke Street Mall building in Melbourne’s CBD. Six to nine other “key suburban” stores will be refurbished, but locations were not disclosed due to “commercial sensitivity”.
David Jones also unveiled ambitions to deliver at least 5-10 per cent net profit growth every year between FY09 and FY12 and reduce the cost of doing business by 50-80 basis points over the life of the new plan. More than half of the cost savings would be achieved during FY09-10, in-line with slowing economic growth, said chief executive Mark McInnes.
“We have identified 74 significant opportunities to sustainable reduce our company’s cost base. Many of these are fixed cost projects requiring re-engineering of our business processes,” he said.
Many of the savings would come from increased energy efficiency, improved stock taking technology and using the increased space from store refurbishments, the company said.
The retailer also said they expected between 1-3 per cent sales growth for FY01 and FY10.