By Sarah Falson
SYDNEY: Narta member, David Jones, last week reported first quarter sales were better than anticipated, with the retailer forecasting a strong Christmas period for the month ahead.
According to a report posted on the Australian Stock Exchange website, sales were posted as $430.3 million in the three months to October 28, which is 6.3 per cent higher than the $405 million reported in the previous period.
A David Jones spokesperson told the Sydney Morning Herald: "The company is well prepared as the leading gift giving destination for the important Christmas trading period.
"Management is confident that the company’s strong business model positions it well to continue delivering its previously stated guidance of five to 10 per cent underlying profit after tax growth in both 2006/07 and 2007/08."
According to the Australian Financial Review, the company is also expecting its self-branded credit card will contribute to a strong Christmas sales period.
David Jones chief executive Mark McInnes told the Sydney Morning Herald that the sales results for the three months to October 28 were more favourable than anticipated.
He also said the results mark an improvement in the Australian retail environment as a whole, as well as the success of David Jones’ business model.
"Our company’s sales growth in the first quarter exceeded the two to four per cent guidance we gave at the time of the FY06 results announcement on September 27, 2006.
"This is indicative of a strengthening in the retail cycle compared to the first quarter 2006 and is a testament to the strength of our business model."
Current.com.au spoke to a David Jones sales assistant who works in the ‘Sounds’ department which sells home theatre packages and components at the Market Street, Sydney store.
According to the spokesperson, the Christmas rush hasn’t begun yet, but the floor staff anticipates 1 December will be the beginning of the ‘crazy season’.
“We’re still selling, but not as much as we’d like to. Hopefully by next week the rush will start. At this time we haven’t got any promotions going, either,” he said.
Compared to the same time last year, the spokesperson cited this year as slow, and blames the recent interest rates increase on pre-Christmas buying decreasing.
“You have to consider the interest rates. They were lower last year. Back then the repayments weren’t as much as they are this year.
“The burden on the average household wasn’t as much last year. But we’ll just have to wait and see – it could be a hard one for families this year.”