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David Jones sales decline further ahead of Christmas

DavidJonesDepartment store retailer David Jones has seen sales decline by 5.3 per cent and by 5.2 per cent in comparable stores in its latest trading update.

Parent organisation, South African conglomerate Woolworths Holdings, said sales growth was impacted, but gross margin was protected, by the pull-forward of the end of season
winter sale into late June and a reduction in promotional activity throughout the period.

Key concession brands also “reduced tactical campaign activity” in David Jones to reduce discounting.

Retail rival, Myer, recently dropped its sales targets at the company’s AGM.

Woolworths said David Jones was further disrupted by the refurbishments of the Bondi Junction Food Hall and the Elizabeth Street store, plus the implementation of a new inventory management system.

“Sales in the last six weeks have shown an improving trend. Retail space reduced by a net 2.2 per cent as we continue to drive space optimisation,” the retailer said.

In a more positive sign, Country Road Group sales increased by 8.3 per cent in Australian dollar terms.

Sales in comparable stores (which excludes Politix stores acquired in November 2016) declined by 0.4 per cent, t hough “market share has improved” according to Woolworths.

Trading space reduced by a net 2.0 per cent during the period (excluding Politix).

Eight new Politix locations within David Jones stores during the period, which “are seeing positive results.

Overall group sales for the first 20 weeks of the 2018 financial year increased by 2.6 per cent (3.1 per cent in constant
currency terms) compared to the prior period.

Recently, David Jones launched a premium technology category, a curated offer featuring premium brands focusing on audiovisual products.

It will roll across eight stores in Australia including at Bourke Street and Chadstone in Melbourne, Bondi and Market Street in Sydney, Queens Plaza in Brisbane Adelaide Central and Hay Street in Perth.

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