By Claire Reilly
David Jones has released its fourth quarter sales results, posting a slight decline in total and like-for-like sales for the quarter and for the full financial year.
The results were bolstered by the “high margin” beauty, womenswear and accessories categories, but were “adversely impacted” by poor electronics sales. Despite this, the company is bullish about its future in the electronics space after striking a deal with Dick Smith that will see the electrical retailer manage electronics sales in David Jones stores.
DJs reported total sales revenue of $449.8 million for 4Q13 (28 April – 27 July 2013). This represented a year-on-year decline in total sales of 1.3 per cent, and a 2.9 per cent decline in like-for-like sales. Like-for-like sales during the period were affected by the opening of David Jones’ new Highpoint department store in Victoria, and refurbishment disruptions at its Canberra store.
Total sales for the financial year mirrored fourth quarter declines, dropping 1.2 per cent from $1.868 billion in FY12 to $1.847 billion in FY13. Like-for-like sales were down 1.8 per cent on the previous year, from $1.868 billion in FY12 to $1.835 billion in FY13.
“Throughout the quarter we concentrated on managing our winter inventory and as a result whilst we maintained share of voice, we did not match all of the additional competitive activity that occurred," David Jones CEO Paul Zahra said.
"We also focused on full margin sales through initiatives such [as] our ‘United States of Accessories’ campaign in late July and price reductions through our ‘Cost Price Harmonisation’ program.
“I am pleased to report that following 15 months of reducing the depth and breadth of our discounting, we believe we now have a promotional program which reflects the right mix of discounting versus full margin sales periods. The duration of our discounting events in 4G13 for example have been reduced by 33 per cent compared to 4Q11.”
Investment in service has continued with the company having launched its 'Stock Search @ POS' capability in July and is acheiving 20,000 inventory searches per week. At the same time, the company completed the roll-out of Horizon 2 of its omni-channel retailing strategy, including its 'click & collect' service, site improvements and the ability to buy online from gifts lists created in-store.
"In this environment we are focusing on managing these parts of our business that we can control such as inventory, gross profit margins and costs," Zahra said.
"We also remain focused on the continued roll-out for our future strategic direction plan."