DJs fails to fire

 

David JonesDavid Jones has again failed to fire in the fourth quarter of the 2013 financial year, with sales slipping 2.9 per cent on a like for like basis and 1.3 per cent overall.

Total sales revenue for the fourth quarter, April 28 to July 27 2013 came in at $449.8 million.

Full year 2013 total sales were down 1.2 per cent to $1.847 billion, with comparable sales slipping even further, by 1.8 per cent.

David Jones CEO, Paul Zahra, said that throughout the quarter the company concentrated on managing winter inventory, and while it maintained share of voice, it failed to match additional competitive activity.

“We also focused on full margin sales through initiatives such our United States of Accessories”campaign in late July and price reductions through our cost price harmonisation program,” Zahra

“I am pleased to report that following 15 months of reducing the depth and breadth of our discounting, we believe we now have a promotional program which reflects the right mix of discounting versus full margin sales periods. The duration of our discounting events in 4Q13 for example have been reduced by 33 per cent compared to 4Q11,” he said.

From a category perspective the high margin womenswear, beauty, and accessories categories delivered sales growth in 4Q13 and the menswear and childrenswear categories were broadly flat. Total sales performance was adversely impacted by home categories, in particular electronics, which continued to be subject to industry and price pressures.

“Electronics has been a very challenging category for a number of years. As part of our review of underperforming categories we entered into a retail brand management agreement with Dick Smith which provides us with an underwritten minimum contribution. It also enables us to benefit from any sales upside in this category, although we do not expect this to be significant in FY14.

“Effectively, what has been an underperforming category for us will now be a profit contributor. We have also made good progress in exiting music, DVDs and electronic games,” Zahra said.

“In this environment we are focusing on managing those parts of our business that we can control, such as inventory, gross profit margins, and costs. We also remain focused on the continued rollout of our Future Strategic Direction Plan.”

“Whilst this will ensure we are well placed to capitalise on any strengthening in consumer sentiment as it occurs, we expect that over the next 12 months trading conditions will remain challenging, with consumer sentiment continuing to be subdued and competitive pressure continuing,” Zahra said.

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