By Claire Reilly
David Jones has become the latest company to release financial results during the busy end of financial year reporting season, with the company posting weak sales but insisting that it is on track with its “Future Strategic Direction Plan”.
David Jones’ total and like-for-like sales for the fourth quarter were down 1.3 per cent compared to the previous year, while total sales for the financial year dropped 4.6 per cent and like-for-like sales fell 4.3 per cent.
Sales for the fourth quarter were $455.8 million while David Jones made more than $1.86 billion in sales for the full financial year.
While the results were disappointing, DJs CEO Paul Zahra said they were consistent with expectations.
“Whilst trading conditions continued to be challenging throughout the quarter we did see a continued improvement in our sales tracking, with sales in 4Q12 down 1.3 per cent,” he said. “We are making good progress in implementing our Future Strategic Direction Plan and look forward to updating the market on our progress at the time of our full year results in September.
“Whilst the trading environment remains challenging we have a strong business model, a clear business strategy, a strong balance sheet, good cashflows, ownership of our flagship Sydney and Melbourne CBD stores and the best national and international brand portfolio in Australia.”
The company’s Future Strategic Direction Plan, also known as the David Jones “3 point strategy”, was announced by Zahra in March this year following a set of particularly grim profit results. In the roadmap, David Jones outlined a number of issues in the retail environment, including “structural changes, macro-economic headwinds [and] challenging Australian consumer credit markets”.
The company proposed to tackle these challenges by growing its store network, strengthening its core business – with a particular focus on strong brands – and a program of “transformation” which would see the retailer increase its levels of “customer service and engagement” and focus on its omni-channel strategy.
In line with this program of changes, Zahra today announced that David Jones had decreased the duration of its Winter Clearance by two weeks during the fourth quarter.
“This is consistent with our strategy to reduce the length of our discount events and to focus on new inventory,” he said.