David Jones profit plunges by 42%

Reduced footprint remains priority.

Operating profit has tumbled 42% to $37 million at David Jones for the 53 weeks ended 30 June, 2019. Turnover and concession sales declined by 0.8% during the period, with comparable store sales 0.1% lower.

Parent company, Woolworths Holdings Limited, said challenging economic and trading conditions continued to weigh on group results. David Jones experienced peak disruption from the refurbishment of the Elizabeth Street flagship store in Sydney, impacting sales by circa 3% in the second half.

The refurbishment is on track to be completed by the end of the third quarter of FY2020. Fashion and beauty floors will be completed pre-Christmas, with food and home floors opening in March 2020.

David Jones CEO, Ian Moir

Online sales experienced growth of 46.8%, now accounting for 7.7% of total sales. Gross profit margin was 1.1% lower than the prior period as a result of higher markdowns and an increased focus on clearance.

Net retail space grew by 0.4% with the opening of two new stores, although space reduction to improve productivity of the store portfolio is a priority.

An impairment charge of $437.4 million was recognised at 30 June, 2019, reducing the valuation of David Jones to circa $965 million.

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