David Jones reports improving trading performance

The department store chain’s improved trading performance was powered by Black Friday sales, stimulus and eased restrictions.

David Jones reports improving trading performance. Picture: NCA NewsWire / Gaye Gerard

Upmarket department store David Jones has reported an improving trading performance in the lead up to Christmas, powered by the Black Friday sales, government stimulus and the easing of restrictions, although the severe 12-week lockdown in Victoria was a drag on its results.

South Africa’s Woolworths Holdings has issued a trading update to the market with its David Jones department stores which showed a strong Christmas similar to the bounce in sales for many consumer discretionary retailers, especially in the fashion sector which has ridden a wave of demand from shoppers.

Woolworths Holdings said that in Australia while the 12-week lockdown in the state of Victoria negatively impacted sales for the half, the easing of COVID-19 restrictions, together with the extended JobKeeper relief, its successful Black Friday and Cyber Monday campaigns, and further growth in our online sales, contributed to an improved performance in the last six weeks of the reporting period.

David Jones sales over the 26-week period declined by 8.8 per cent and by 10.5 per cent in comparable stores.

The retailer, which bought David Jones for $2.1bn in 2014, said excluding Victorian stores, which traded significantly down on the prior period due to the extended lockdown in the state, the balance of the David Jones business, including online, grew by 5.9 per cent.

Online sales increased by 55.5 per cent, contributing 17.7 per cent to total sales over the half.

At its Country Road Group business - which houses Country Road, Trenery, Witchery, Mimco and Politix, it delivered strong sales growth of 6.7 per cent in the last six weeks of the period, underpinned by new product ranges, particularly in the Country Road business, Woolworths Holdings said.

Sales over the half declined by 5.2 per cent and by 2.4 per cent in comparable stores, negatively impacted by the lockdown in Victoria. Excluding Victorian stores, the balance of the Country Road Group business, including online, grew by 8.2 per cent.

Online sales increased by 52.5 per cent, and contributed 31.6 per cent to total sales for the period.

Woolworths Holdings also said the recent sale of the Bourke Street Men’s property in David Jones was completed in the period, resulting in proceeds of $121m and a profit on sale of approximately $23.5m.

In November, Woolworths Holdings revealed David Jones was witnessing early signs of a recovery outside of Victoria, with sales growth in other states and a booming online business providing evidence of a pick up from the lows of earlier this year when the global health crisis emerged.

Upmarket department store David Jones said shuttered stores in Victoria and a shrinking of demand for formal wear during the worst of the Covid-19 pandemic in Australia was partially mitigated by a move to online by shoppers, and strong sales in beauty and appliances.

The core David Jones business excluding the Victorian stores increased sales by 6.7 per cent for the first half to November. with its core David Jones business increasing sales by 6.7 per cent for the first half to November although for the full business David Jones posted a sales decline of 11.7 per cent for the 20 weeks to November 15 and by 14.6 per cent in comparable store sales.