rst half of the current financial year and consumer confidence surveys suggest little improvement in retail sales and an almost certain deterioration in earnings across the sector. Online sales a bright spot David Jones certainly hasn’t changed its view of economic conditions and retail trading in Australia, revealing a further fall in comparable-store sales. There was some positive news, however, with a 62 per cent increase in online sales for the six months to December 2019. The results for David Jones and the Country Road group, owned by the South African retailer Woolworths, were impacted by store development projects, a new store in New Zealand and the withdrawal of its four specialty-brand concessions in Myer stores. Woolworths Holdings has indicated it has no plans to exit David Jones despite flagging sales and trading profits and writing off $1.15 billion of its 2014 $2.1 billion acquisition of the department store group. However, it would not be a wise bet to back that sentiment as it will take more than 15 years to recover the $1.15 billion lost on the 2014 deal, based on David Jones’s net profit for the 2018 financial year. It would take almost 25 years to recover that lost value on the $37 million net earnings booked for the 2019 financial year. The writedown on the investment caused Woolworths (which has no relationship with the Australian retailer of the same name) to post its first loss as a publicly listed company and virtually cut its share price by half. Turnaround expert onboard Ian Moir, who spearheaded a resurgence in the Woolworths-owned Country Road business, persuaded the company to buy David Jones. Moir was CEO of Woolworths and based in South Africa at the time, but his expectations on the value of the David Jones acquisition have been thwarted by sluggish retail spending by consumers and local management shortcomings as well as key executive and board member exits. Moir has taken responsibility for the problems resulting from the David Jones acquisition and will step down in February from the CEO role at Woolworths he has held since 2011 but will retain the CEO job at David Jones. Surprisingly, Woolworths took a leftfield decision on the replacement for Moir, appointing Roy Bagattini, the former president of clothing company Levi Strauss Americas. A South African, Bagattini, who will take over as CEO on February 17, has worked with Levi Strauss for six years and previously held executive positions with brewers Carlsberg and SABMiller. The attraction of Bagattini was apparently his experience in mergers and acquisitions and in turnaround projects for several companies. Woolworths told South African investors its new CEO would assist the company in meeting the challenges of the changing retail industry and would drive “the future strategy” of the group. After nine years, Moir will return to Australia with Woolworths, hoping he can lift David Jones’ financial performance and recover at least some of the lost value on the asset. Moir has been overseeing the David Jones business from South Africa since February 2019, work that has included right-sizing stores and management ranks, refurbishment projects and boosting online sales. The current plan for the department store chain is to reduce its trading floorspace by 20 per cent by 2026. Focus on food Moir has also overseen the development of the food strategy involving standalone gourmet grocery outlets, a renewed emphasis on food halls in key David Jones department stores and the sale of David Jones-branded products in other selected retail stores. Moir has also been working to return David Jones to its former glory by focusing on the middle to top end of the market, backing recognised local brands after an underwhelming customer response to African apparel ranges. The rejig of the apparel offer has included exclusive ranging of Sportscraft, Saba and JAG as well as the Woolworths-owned Country Road, Witchery, Trenery, Mimco and Politix after withdrawing them from Myer. David Jones has added more than 65 new womenswear brands exclusive to its stores since June last year, including Toni Maticevski, a designer range that had previously sold for 15 years through Myer. Retail recession or not, Moir has the motivation to make a success of the business in which he saw as a great opportunity for Woolworths back in 2014. He has certainly laid the groundwork, and there were some indications of progress in the first-half results for the 2020 financial year, notwithstanding the 0.4 per cent comparable-store revenue decline. The completion of the refurbishment of the flagship Sydney central business district store should have a positive effect, and that store accounts for around 15 per cent of the retailer’s total sales.