David Jones sales growth in sharp downturn

Sales growth at the upmarket department store has ground to a near halt, as unseasonal weather bites.

David Jones sales increased by 2.2 per cent in Australian dollar terms, in the 19 weeks to November 6. Picture: Getty.

David Jones, and its stablemate fashion house Country Road, have witnessed a sharp downturn in sales as volatile weather conditions and unseasonal weather patterns led to high levels of promotions and discounts to clear stock.

The upmarket department store, owned by South African retailer Woolworths Holdings, was particularly hard hit by the intense competition in the sector as its sales trajectory – which for the last few years had been close to 10 per cent growth – almost ground to a halt.

Woolworths Holdings released a trading update for the 19 weeks to November 6 on the Johannesburg Stock Exchange this afternoon.

It reported that David Jones sales increased by 2.2 per cent in Australian dollar terms.

Like for like store sales, after adjusting for the impact of the discontinued Dick Smith Electronic concession, grew by only 0.6 per cent and retail space grew by a net 3.4 per cent.

It marks a significant slowdown in David Jones performance, which for a long time has trounced arch rival Myer. In July David Jones ​posted an 8.4 per cent increase in sales in Australian dollar terms and 7 per cent growth in like for like sales for the 52 weeks to June 26.

Things look to have also worsened for Country Road.

Country Road Group, which includes labels Country Road, Mimco, Trenery and Witchery, saw sales decline by 2.8 per cent in Australian dollar terms for the 19 weeks to November 6. Sales in comparable stores were a much worse, 4.9 per cent, lower and retail space grew by a net 2.0 per cent.

“The start to the financial year in both South Africa and Australia was impacted by an extremely warm winter and consequent very high levels of promotion, as all retailers sought to clear stock,’’ Woolworths Holdings said in a statement.

“As summer arrives, we are seeing sales improve, albeit in challenging conditions in both markets.”

In September Country Road Group chief executive Matt Keogh suddenly resigned after only two years in the role, and in something of a merry-go-round of bosses, Scott Fyfe was appointed Country Road’s third boss since 2014.