By Claire Reilly
David Jones has released its fourth quarter sales results, posting a slight decline in total and like-for-like sales for the quarter and for the full financial year.
The results were bolstered by the “high margin” beauty, womenswear and accessories categories, but were “adversely impacted” by poor electronics sales. Despite this, the company is bullish about its future in the electronics space after striking a deal with Dick Smith that will see the electrical retailer manage electronics sales in David Jones stores.
In a release to the Australian Securities Exchange today, DJs reported total sales revenue of $449.8 million for 4Q13 (28 April – 27 July 2013). This represented a year-on-year decline in total sales of 1.3 per cent, and a 2.9 per cent decline in like-for-like sales. Like-for-like sales during the period were affected by the opening of David Jones’ new Highpoint department store in Victoria, and refurbishment disruptions at its Canberra store.
Total sales for the financial year mirrored fourth quarter declines, dropping 1.2 per cent from $1.868 billion in FY12 to $1.847 billion in FY13. Like-for-like sales were down 1.8 per cent on the previous year, from $1.868 billion in FY12 to $1.835 billion in FY13.
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Speaking about the results was David Jones CEO, Paul Zahra.
“Throughout the quarter we concentrated on managing our winter inventory and as a result whilst we maintained share of voice, we did not match all of the additional competitive activity that occurred. We also focused on full margin sales through initiatives such [as] our ‘United States of Accessories’ campaign in late July and price reductions through our ‘Cost Price Harmonisation’ program.
“I am pleased to report that following 15 months of reducing the depth and breadth of our discounting, we believe we now have a promotional program which reflects the right mix of discounting versus full margin sales periods. The duration of our discounting events in 4G13 for example have been reduced by 33 per cent compared to 4Q11.”
Calling out the electronics category as a particularly poor performer, Zahra said David Jones was set for a turnaround in this space.
“Electronics has been a very challenging category for a number of years. As part of our review of underperforming categories we announced on 12 August 2013 that we had entered into a Retail Brand Management Agreement (RBMA) with Dick Smith which provides us with an underwritten minimum contribution. It also enables us to benefit from any sales upside in this category, although we do not expect this to be significant in FY14.
“Effectively what has been an underperforming category for us will now be a profit contributor,” he said. “We have also made good progress exiting Music, DVDs and Electronic Games.”