By Claire Reilly

SYDNEY, NSW: David Jones announced its fourth quarter results for the 2011 financial year today, posting a staggering 10.3 per cent drop in total sales for the period 1 May to 31 July 2011.

The total sales figure was $462.1 million for the quarter, a sharp decline from the fourth quarter 2010 figure of $515.3 million, in what has been a horror period for the retailer.

Sales for January to July (constituting third and fourth quarter results for the 2011 financial year) were down 7.1 per cent on the previous year, indicating that the past three months have been particularly tough for the embattled department store.

Speaking about the sobering figures was David Jones CEO Paul Zahra.

“Trading conditions continue to be very challenging in the early days of 1Q12,” he said. “In the face of this environment we are continuing to manage our costs tightly and we are actively working and making progress in managing our inventory position.

“We believe that given current tradition conditions and the fact that household saving levels are higher than during the GFC it is important to invest in our business with initiatives that will entice consumers to shop with us.”

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Those initiatives include July’s announcement of “60 exciting new brands” to join the DJs stable, as well as a new brand campaign and the national launch of a Personal Shopping Service for the department store.

“We are progressing well with our new Point of Sale System,” Zahra added. “We are currently tendering for a new IT solution to support our multi-channel strategy and to upgrade and improve our online offering.”

The company has also reaffirmed its Profit after Tax (PAT) guidance for the 2011 financial year, issued in mid-July, of -0.5 to -2.0 per cent. When this guidance was provided, the company also predicted a PAT Guidance for the first half of the 2012 financial year of -15 to -20 per cent.

“We are facing an extremely difficult trading environment,” said Zahra. “Having said that we have a strong business model and a clear business strategy, we have a strong balance sheet, good cashflows, the best national and international brand portfolio in Australia.”