Due to impairment.
Woolworths Holdings, parent company of David Jones, has suffered a loss of $3.5 million for the 52 weeks ended 24 June, 2018 – a 50% decline from the previous corresponding period.
A reassessment of the carrying value of David Jones assets resulted in an impairment charge of $712.5 million processed in the first half of the financial year.
Woolworths CEO, Ian Moir described 2018 as a difficult year with significant costs and disruption from transformation initiatives in David Jones and poor performance in the fashion business. “This was exacerbated by challenging economic and trading conditions in both Australia and South Africa.”
He said the David Jones business experienced significant change during the year, including the implementation of new merchandise and finance systems, the re-platforming of its online systems, the launch of the new food initiative and the move of its head office from Sydney to Melbourne.
“After a difficult first half, sales increased by 2.2% and by 2.7% in comparable stores in the second half. Full year sales were 0.9% lower. In David Jones, the head office move to Melbourne is complete, as are the significant systems implementations that began last year.
“We now look forward to optimising those systems, focusing on trading the business and improving the customer experience. We have now also reduced our cost base by $25 million across Australia, largely through a restructure that took place in June,” Moir said.
Trading for the first seven weeks of the new financial year has shown positive signs. In Australia, David Jones sales are up 3.7%.