Coronavirus kills foot traffic at David Jones and Country Road Group stores

Sales drop at David Jones will dent performance this half, especially at stores frequented by tourists, the company said.

Demand was impacted since early March when social distancing measures were introduced.

South African retailer Woolworths Holdings has warned that trading at its upmarket department store David Jones and its stable of fashion outlets within the Country Road Group stable has suffered from the downturn in foot traffic at shopping centres in the wake of the coronavirus pandemic.

Sales for David Jones had fallen 19 per cent in March, while in some Country Road Group stores sales had collapsed by as much as one third.

In a statement to the market it said David Jones has, for now, taken the decision to continue to trade in its large format stores which are cashless and able to accommodate social distancing protocols.

The David Jones online channel which continues to operate as normal and has proven to be robust, has seen a significant surge in transactions and revenues, the company said.

However, the drop in sales at David Jones will dent its performance this half, especially at its stores highly frequented by tourists.

“The impact of the slowdown due to COVID-19 was seen earlier in stores that have a higher proportion of tourist trade and Asian demographic customers. The impact has subsequently become more widespread across all stores and customer segments with a significant reduction in foot traffic in March.”

It said sales for the four-week period to the end of March were 19 per cent down on the prior comparable period, and within this the online channel grew by 108 per cent, representing 20.3 per cent of sales.

Woolworths Holdings said sales for the first nine weeks of the second half of the financial year were up 0.5 per cent on the prior comparable period.

“We continue to see a drop in footfall across the store portfolio and are focused on stimulating trade, reducing inventory and generating cash.”

At Country Road Group, which includes brands Country Road, Trenery, Mimco, Witchery and Politix, the smaller format of its stores makes it difficult to implement social distancing protocols. Accordingly, it decided to close all stores for at least four weeks, commencing from March 28.

“The closure of stores means that our retail employees will be stood down during this period, in line with Australian workplace laws. However, the federal government JobKeeper wage subsidy program will provide some relief.”

It said demand was impacted since early March when social distancing measures were introduced. Store traffic decreased by 36 per cent in the first two weeks of March and by more than 60 per cent in the subsequent two weeks.

This contributed to an overall decrease in sales of 32.3 per cent in March versus the prior comparable period, compared with an increase of 1.7 per cent in the preceding nine weeks to the end of February.