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David Jones’ strong second half buoys difficult year

A string of impairments have kept the business’ profit down for years.

Sales in department store David Jones jumped during the last year despite the continuation of the Covid-19 crisis and intermittent lockdowns hampering trade.

Sales in the department store rose 2.3 per cent during the year to June 27, and 0.9 per cent in comparable stores, as customers increasingly shopped online through lockdown and unprofitable space was minimised.

And sales rocketed 17.1 per cent during the second half of the year, when lockdown impacts were largely confined to Melbourne before the current spate of outbreaks across NSW and South Australia.

This followed a difficult first half to the year, which saw a sales dip of 8.8 per cent offset by rent relief, JobKeeper and “cost out initiatives”.

Online sales grew 24.4 per cent according to parent company Woolworths Holdings, which made up 17.3 per cent of the business’ total sales for the period, as lockdowns throughout the year meant footfall in central business districts and airport locations continued to struggle.

Sister-business Country Road also delivered growth, with sales up 13.4 per cent and 15.3 per cent in comparable sales, while online sales soared 30.7 per cent and made up 29.7 per cent of total sales for the fashion business.

The result was due to Australia’s “stronger economic fundamentals, improved customer confidence and restrictions on international travel” supporting retail spend and consumption patterns, according to Woolworths Holdings’ chief executive Roy Bagattini.

The growth, however, comes off the back of a difficult 2020 for retail which saw David Jones suffer a loss before interest, tax and impairments of $33 million.

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