David Jones has reported operating profit of $56 million for the 26 weeks to 27 December 2020, up 33.3% on the prior period, bolstered by government support and rent relief, as well as space reductions including the exit from Market Street.

However, the 12-week lockdown in Victoria dragged sales down for the department store, declining 8.8% during the half or 10.5% on a comparable store basis. Excluding Victorian stores, the balance of the business including online, grew by 5.9%.

Online sales surged by 55.5% contributing 17.7% to total sales over the half.

With easing of restrictions and the extended JobKeeper relief, coupled with successful Black Friday and Cyber Monday campaigns and online growth, sales performance improved in the last six weeks of the reporting period.

However, David Jones parent company, Woolworths Holdings expects the trading environment to remain challenging and uncertain throughout the second half of the year.

“In Australia, economic fundamentals are stronger and more supportive of an earlier recovery in economic activity, but we are mindful that government initiatives, which have buoyed consumer spend, are coming to an end,” the company said in a statement to investors.

“As previously advised, we expect to conclude the sale of the Elizabeth Street property in the second half of the financial year, the proceeds of which will be used to settle debt and further strengthen our balance sheet.

“We remain steadfastly focused on our strategic priorities, including our real estate optimisation efforts in David Jones and driving growth through digital, online and data.”

Changes to David Jones Food offering

David Jones has announced key changes to its Food offering to create a future-fit store portfolio and enhanced online business.

David Jones Food Halls at Elizabeth Street (NSW) and Bondi Junction (NSW) will be elevated and provide a bespoke selection of concession partners and experiential elements. Premium Pantry and Gifting offerings will be further enhanced and extended across stores and online.

Following the significant impact on CBD footfall throughout the pandemic, the David Jones Food Hall in Melbourne’s Bourke Street Mall will close next month ahead of the brand’s surrender of the current Menswear building in August 2022. A new Food offering will be introduced next year as part of the refurbishment of the Bourke Street Womenswear store, including Premium Pantry, Gifting and instore food service options. Food Stores at Capitol Grand (VIC) and Malvern Central (VIC) will also close in April and May 2021, respectively.

David Jones CEO Scott Fyfe said the simplified Food offering would set up the Food business for a sustainable and successful future.

“A recent review of our Food business has helped us identify a number of structural changes we need to make to ensure the ongoing success and profitability of this offering,” Fyfe said.

“Above all, we are committed to the ongoing delivery of the most iconic elements of our Food offering both instore and online. We look forward to continuing to share our David Jones Food range with customers across Australia and New Zealand, and to delivering a world-class instore experience at our Elizabeth Street and Bondi Junction Food Halls.”

For all team members impacted by these changes, there is a focus on redeploying them to other roles across the David Jones business.