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JobKeeper, rent relief buoys David Jones through first half

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

Department store David Jones saw total and comparable sales, and gross margin fall during the 26-week period to 27 December, but still grew operating profit 33.3 per cent to $56 million due to rent relief, JobKeeper payments and “cost out initiatives”.

Sales fell 8.8 per cent during the half, or 10.5 per cent in comparable stores, as the business’ Victorian stores struggled through trading restrictions. Gross margin dropped 0.3 per cent to 34.8 per cent.

On the whole, the David Jones business grew 5.9 per cent during the half, driven by 55.5 per cent growth in its online channel.

South African parent company Woolworths Holdings said the Australian environment is more supportive of an earlier retail recovery than other parts of the world, but said it was wary that government support, which has buoyed consumer spend, is ending.

“Early expectations of a recovery in Australia were short lived, with the imposition of the stage 4 lockdown in the state of Victoria,” the business wrote in a letter to investors.

“While this negatively impacted sales for the half, the subsequent easing of Covid-19 restrictions, together with the impact of government support on consumer discretionary spend, our successful Black Friday and Cyber Monday campaigns, and further growth in our online sales, contributed to an improved sales performance in the last six weeks of the reporting period.”

Stablemate Country Road Group saw sales growth of 6.7 per cent in the last six weeks of the period, but when taken over the half fell 5.2 per cent. Country Road’s online grew 52.5 per cent during the 26 week period.

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