David Jones and Country Road Group warn of shipping delays threat to Christmas supplies

David Jones and its fashion retail partners are facing shipping delays from China of up to a month, threatening to slow supplies ahead of Christmas.

David Jones and Country Road Group, both owned by South Africa’s Woolworths Holdings, are facing shipping delays of up to four weeks for new fashion as global supply chains buckle under the pressures of Covid-19. Picture: Mark Stewart

David Jones, the nation’s second-biggest department store, and its retail partners – Country Road and Witchery – are facing shipping delays from China of up to a month, threatening to slow supplies ahead of Christmas.

The delays were disclosed by Roy Bagattini, chief executive of Cape Town-based Woolworths Holdings, in an investor call with local analysts in South Africa.

“Australia, yes they do get a lot of their sourcing from the China base and we are experiencing on average between two to four weeks delay in bringing new product in and that it’s important obviously from a newness perspective and a refresh perspective as we go into different selling moments for us,” Mr Bagattini said in an update in South Africa.

It is the latest in a string of warnings from Australian companies about supply chain issues in the lead up to the holiday period, one of the most important for retailers.

For a leading fashion houses like David Jones and Country Road Group, the ability to quickly and seamlessly turnaround inventory to stock new seasonal offerings is crucial in staying ahead of the competition and meeting the demands of customers.

Mr Bagattini said the South African fashion and grocery business was in a much better supply position than his stores in Australia, which also include the Mimco, Trenery and Politix brands.

David Jones and the other retail outlets owned by Woolworths Holdings in Australia were also facing higher shipping and freight costs, investors were told, with some apparel held over during the lengthy lockdowns now needed to be discounted to make way for next season’s clothing.

While senior executives at David Jones don’t believe there is a possibility of empty shelves, shipping delays are causing a headache just at the time the retailer has come out of lockdowns in NSW and Victoria and is focused on the crucial Christmas trading period.

Mr Bagattini told investors David Jones and the Country Road Group wasn’t facing large availability issues, but stock levels were a challenge that needed to be managed by its Australian-based retail executives.

“Availability overall has not been materially affected, something teams are managing well. Obviously the bringing of new stock needs to be sort of managed and juggled with the context of coming out of lockdown and carry over of stock we had from that lockdown and the way we are going to manage that going forward,” he said.

A spokesman for Woolworths Holdings said the retailer was seeing strong levels of spring, summer stock across the Australian businesses including fashion, home and beauty in preparation for the Christmas and holiday trading period.

“Our teams have continued to successfully manage global supply chain constraints in recent months, factoring in some irregular delivery time frames and the additional uplift in demand as states have emerged from lockdown,” he said.

Recent commentary from equity analysts at Macquarie, however, suggests inventory levels at other retailers including Kmart, Target and Bunnings remained strong ahead of Christmas.

Originally published as David Jones and Country Road Group warn of shipping delays threat to Christmas supplies