David Jones parent company, Woolworths Holdings, has confirmed an accelerated restructure of the department store network and reduction in floor space with discussions with landlords now underway.
Although David Jones has continued to trade in its large format stores through the period, COVID-19 has had a significant impact on foot traffic and sales. For March and April, sales fell by 35.8%, following a slight 0.5% increase for the first nine weeks of the year.
Online sales in the second half of the financial year have doubled compared to the prior comparable period, the department store said, and since the easing of restrictions, there has been a “positive uplift” in footfall and “encouraging sales performance” across the store network.
The Woolworths board has initiated several strategic projects targeted at strengthening the balance sheet and positioning the group for sustainable, longer-term growth.
This includes $75 million funding support for the Australasian businesses in the form of a loan secured by a second lien, with provision for a further $25 million in-principle support.
“We expect the challenging and fluid operating environment brought about by the pandemic to continue for the foreseeable future,” Woolworths Holdings said in its trading update.
“While the business is well prepared to take full advantage of any improvement in trading conditions as government restrictions continue to ease, these circumstances also present opportunity to take clear and decisive actions to improve the effectiveness of our business model.”