Online boom boosts David Jones as retailer sees signs of recovery
David Jones is witnessing early signs of a recovery outside of Victoria, with sales growth in other states and a booming online business.
David Jones is 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.
And the retailer did manage to eke out a lift in revenue across its David Jones stores and its specialty chains such as Country Road, Mimco and Trenery after excluding the Victorian store network, with its core David Jones business increasing sales by 6.7 per cent for the first half to November.
But it wasn’t enough to turn around continued falling sales at the department store and Victoria’s ills, with David Jones posting that sales declined by 11.7 per cent for the 20 weeks to November 15 and by 14.6 per cent in comparable store sales.
Woolworths Holdings, the South African owner of David Jones, provided a trading update to its investors late Thursday with the accounts still showing the bruising from the coronavirus pandemic and its impact on sales, the fashion and apparel sectors and consumer confidence. Arch rival Myer, which has more of an exposure to Victoria, which struggled for months under stage 4 lockdown restrictions, is yet to provide a trading update and did not provide any guidance at its annual general meeting last month.
Woolworths Holdings said in its update the 12-week lockdown in Victoria negatively impacted sales growth for the current period.
“This was partially offset by the ongoing shift to online, which continued its growth momentum. David Jones sales were also impacted by lower demand in formal wear, with other categories such as beauty, homeware and appliances performing relatively better,” it said.
The retailer said excluding the Victorian stores, which traded 76 per cent down on the prior period on a total sales basis, the balance of the David Jones business grew by 6.7 per cent, assisted by the shift to online which grew by 65 per cent and contributed 19.6 per cent to total sales over the period.
The flagship David Jones Elizabeth Street store in Sydney, which continued to see lower footfall and tourist activity, grew sales by 5.3 per cent, noting that the prior period was disrupted by refurbishment.
Meanwhile, its Country Road Group, which includes retail chains Country Road, Witchery, Mimco, Trenery and Politix, was similarly hit by the Victorian lockdown, although
mitigated by the shift to casual wear and online, particularly for the Country Road brand, which grew sales on the prior period.
Sales declined by 10.9 per cent for Country Road Group and by 7.7 per cent in comparable stores.
Excluding Country Road Group’s Victorian stores, which traded 76.7 per cent down on the prior period on a total sales basis, the balance of the business grew by 6.5 per cent, aided by online sales growth of 55.7 per cent. Online contributed 34.7 per cent of total sales over the 20-week period.
In September, Woolworths Holdings posted its full-year results for 2020, which showed David Jones had slumped to a loss of $33m from a profit of $37m in 2019. Revenue for David Jones in fiscal 2020 was down 6.4 per cent to $2.064bn.
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