David Jones records major downturn amid RBA hikes

Australia’s most iconic department store has recorded severe downturns across the board as it battles against climbing interest rates.

The soaring cost of living and its impact on household budgets has been blamed for a sharp downturn in spending at one of the country’s biggest department stores.

David Jones has recorded a double-digit downturn in sales at its city, suburban and regional stores, according to The Australian.

The retailer had been battling to meet budgets for June in the wake of the Reserve Bank’s decision to hike the official interest rate even higher in May.

Spreadsheets obtained by The Australian showed a dramatic drop in sales across several flagship, suburban and regional stores between June 4 and 10.

One of the worst hit was David Jones at Eastland, on the outskirts of eastern Melbourne, where sales were down 38.96 per cent.

Leaked internal David Jones accounts show the up-market department store has suffered a sales collapse.

At Sydney’s Warringah Mall David Jones, sales plunged 20.54 per cent, while Melbourne’s Highpoint outlet dropped 20.16 per cent.

Melbourne’s ritzy suburb of Malvern recorded a loss too, with sales dropping 19.01 per cent.

The store’s internal leadership were reportedly pointing blame at the RBA’s rate hikes in May and June, which it felt had severely harmed consumer confidence.

Expensive homewares and bigger ticket items had been worst hit, they said.

The retailer was also well behind on its June forecast of $56 million, with just total sales being $50.5 million.

The Sydney CBD store was also far behind its $7.634 million forecast for the week, having recorded $7 million.

It’s sales were also 6.87 per cent down on the same time last year.

One outlier was the David Jones in Melbourne’s Bourke Street Mall, where sales were up 13.51 per cent compared to last year.

Weekly sales from David Jones’ flagship CBD stores, suburban and regional stores showed double digit sales dives.

The widespread downturns come just three months after the department store was purchased by private equity firm Anchorage Capital Partners for about $100 million.

The slow sales were partially the result of June being a typically slower month on the calendar, a spokesperson told The Australian.

“Whilst we did take into account the headwinds we knew were coming in the Australian economy, we did set ourselves aggressive targets for the year,” the spokesman said.

“Since the last interest rate hike, we have seen customer traffic in store slowing and foot traffic is down on last year. Traffic online remains strong, but we are seeing customers becoming more selective in their purchases.”