Unlike its rival Myer who reported positive first half year results, David Jones’ Future Strategic Direction Plan has yet to deliver any positive returns.
The company has reported profit for the half year is $73.5 million, which is 13.5 per cent down from last year’s previous corresponding year of $85 million. Meanwhile EBIT dropped to $109.1 million from $125.8 million earned last year.
Sales too also declined 0.7 per cent as the company focused on improving gross profit margins, which it manage to successfully do increasing by 39 per cent to 110bp. This was the result of the company’s reduced discounting and improved supplier trading terms. Further margin improvement is expected over time as the company exits DVD, music and electronic games and improves its category mix, which will see the increase of private label sales to be in line with international peers at approximately 10 per cent.
According to David Jones CEO Paul Zahra, the loss reflects the company’s investment in implementing its Future Strategic Direction Plan and challenging trading conditions
However, the company did achieve a 288 per cent increase in sales from its new website in 2Q13. This was double the entire online sales achieved in financial year 2012. This comes as a result of the addition on 90,000 SKUs, the launch of a mobile store and an iPad app that gave customers the ability to purchase online, digital gift cards and a store booking tool for in-store services.
Over the next 12 months, it plans to focus on introducing new functionality to its site, including ‘click & collect’, incremental delivery options and social commerce.
At the same time the company looks forward to rolling out more ‘next generation store’ concept as part of its new store and refurbishment programs. The ‘next generation store’ concept involves enhanced customer service including Wi-Fi, customer charging stations, seating and traffic analytics. The first of its concept store was launched at Highpoint in March.
“We have continued to make good progress in implementing our Future Strategic Direction Plan and delivered the initiatives outlined in the plan within the timeframes communicated to the market. Our focus going forward is on improving our sales, margin and labour productivity per square metre,” Zahra said.
“We are confident the investment we are making will provide us with a strong sustainable business capable of addressing the retail structural changes currently taking place and positioning us for long term success."