Champagne bars, swanky shoes and smaller stores: David Jones’ plan to bring customers back to department stores

IT MAY look innocuous — a snap of David Jones products on display. But its CEO says it shows what needs to change.

DAVID Jones stores are too big, too empty and too bland. That’s not a snipe from a retail rival, that’s the opinion of DJs’ own chief executive.

DJs boss David Thomas made the observation as the company revealed it will open the previously out of bounds seventh floor of its Sydney flagship branch as part of a $200 million plan to get spendthrift customers back into its department stores.

Other initiatives include replacing plain old “floors” with newfangled “worlds”, a swanky champagne bar with city views, a new focus on food and ripping out acres of shelving so natural light can stream in.

David Jones is undertaking a $200m refurbishment of its Sydney CBD Elizabeth St store.

An “edit” of these features will filter through to suburban and regional stores with most now likely to sport a “food experience” such as a place to eat or a posh grocer.

But underperforming stores could still be for the chop, he said, and even those that stay open will likely shrink in size.

A case in point, said Mr Thomas, was the chain’s Market Street store in the CBD. One of two David Jones’ stores in the heart of Sydney, it stretches over seven stories — but some floors look distinctly empty of actual products.

“If we look at some of the top floors of home in the (Market Street) store it’s over spaced. We will right size and some of that space will be consolidated.”

The company will close its Sydney Market St store in the CBD and operate solely from the historic Elizabeth St store (above).

TOO FEW PRODUCTS, TOO MUCH SPACE

When news.com.au visited the store on Wednesday morning, its upper floors were indeed sparse of things to buy and almost bereft of people to buy them.

On one plinth, in the middle of the store, the only item on display was a small cutlery set — costing almost $500. Wine glasses in cabinets had vineyards of room around them while lonely picture frames languished. Some shelves contained just a few glass tea lights; others had distinctly un-DJs like products on them, like weighing scales and even bin liners.

It means customers have to walk further, and climb higher up the building, to find what they want.

Weighing scales taking up shelf space in the David Jones Market St store.

David Jones CEO David Thomas said parts of the stores have too much space dedicated to too few customers.

DAVID JONES STORES SAME SIZE AS KMART

In contrast, Mr Thomas said the Macarthur store in south west Sydney had dropped in size from 15,000sq m to just 6000sq m — little bigger than your average Kmart — yet had seen few brands disappear. They were just a bit closer together.

“Macarthur is an interesting case because we created a very different customer outcome to what had been there. We put in food service, and we have taken a less than satisfactory store to a very good store and it’s doing very well,” he told news.com.au.

Certainly, David Jones needs to take radical action to prise open wallets and persuade customers to come through the doors.

Artists impressions of the seventh floor overhaul at David Jones Sydney Elizabeth St store.

While not suffering to the extent of long-time rival Myer, which lost half a billion dollars in six months, DJs is hardly in rude health. In the half year to Christmas, the retailer’s South African owner Woolworths (no relation to Australia’s Woolworths) said David Jones’ comparable sales were down 3.3 per cent while its profit sunk 38 per cent to $66 million.

The company said its total store floor space had reduced by 2.2 per cent overall and as much as 5.6 per cent in some stores. New stores that have opened, such as in Maitland in the NSW Lower Hunter Valley, cover a far smaller area than the sprawling shops of old.

David Jones will squeeze 17 floors, over two current stores, into 12 floors over one revamped Elizabeth Street, Sydney, store.

The previously secret seventh floor at David Jones in Elizabeth Street is under reconstruction and will reopen to the public in September.

In Sydney’s CBD the downsizing is even deeper. What were two David Jones stores spread over a total of 17 floors will, by the end of 2019, be one store with 11 floors and a foodie mezzanine as the retailer closes its Market Street branch and squeezes into the one Elizabeth Street premises.

“A lot of people ask, is the department store dying? We like to think of the department store as becoming more relevant but the way we need to run it is changing,” said Mr Thomas.

He summed up David Jones’ lofty goal as being to, “shape the style of this nation by bringing the best of local and international talent into one place”.

And how is he going to bring shoppers into that one place? Through better products, more customer facing staff (“shoes don’t sell themselves,” he said) and making the stores must-see retail destinations.

The company says some of the ideas that will be seen at the revamped Sydney CBD store have already filtered down to smaller suburban stores, like Macarthur Square (above).

At the Sydney flagship, that means that from September the store’s historic seventh floor, previously shuttered off from the public and used only for special events, will be opened up. Natural light will stream in from huge windows on to an area Mr Thomas has dubbed “shoe heaven”. Above the shoes, in an area that was once offices for execs, will be a mezzanine with a champagne bar boasting commanding views over Hyde Park.

Sure, online was important, but you still need the “halo” of the store, he said: “Retail across the world has been massively disrupted and that’s not going away, but the physical and tangible experience of the true flagship store is fundamentally important to our business as it shapes customer’s view of us as a brand,” Mr Thomas said.

References to plain old “floors” are out, replaced by the six “worlds” of David Jones including womenswear, menswear, kids and home.

Expect all new and refurbished David Jones store to feature a food offering such as a restaurant (above, Bondi Junction) or a grocer. Picture: AAP Image/Joel Carrett.

POSH NOSH IN THE BURBS

So far, so swish, but what happens when you move away from the CBDs and into the suburbs? Well, don’t expect champagne bars everywhere, Mr Thomas said, but snazzy in-store supermarkets could be on the cards.

“The Sydney store is about 50,000sq m and our smallest store, Barangaroo, is 1400sq m so we edit and curate the offer to customers. If it’s relevant we will do it, if it’s not we won’t … but a food experience brings customers in and creates a different experience.”

Indeed, the store will open its first food-only David Jones in the Melbourne suburb of South Yarra next year.

Mr Thomas said the company’s preference was to reduce the size of underperforming branches: “Our strategy is more that, [rather] than just closing stores — but if we need to close, absolutely we will, on a case-by-case basis.”

Despite the downsizing there will always be room for one familiar stalwart in the flagship Sydney store, he said: “Michael, at the piano, is an important part of the David Jones experience.”

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