By Aimee Chanthadavong

David Jones has said that the problem is not online but rather the issue lies in the macro-economic environment.

David Jones CEO Paul Zahra said the company experienced challenging trading conditions in a period where consumer confidence is low and in order to over come this, it will continue its multi-channel strategy to drive sales.

“It’s fair to say consumer sentiment is low and that is driving the retail environment. Multi-channel is the way of the future and we see that being significant while online retail is still small in dollar,” he said.

“What we saw in June/July 2011 is unprecedented in a macro-economic environment and has little to do with the online side of things.”

This comes after the company announced that its full year 2011 profit after tax of $168.1 million, down 1.5 per cent on the previous year of $170.8 million. This is in line with the company’s guidance of -0.5 per cent to -2 per cent to last year.

At the same time, total sales were down 4.4 per cent from $2.05 million in full year 2010 to $1.96 million in full year 2011.

As a result, the company plans to continue to invest heavily on improving its customer service, despite the sharp decline in sales in the fourth quarter of 2011.

Based on the success of the Personal Shopping Sevice in David Jones' Bourke Street Mall Melbourne CBD store and international experience in August 2011, the company has launched the service in its CBD stores in Sydney, Brisbane, Adelaide and Perth.

The Company is also introducing an increase in the quantum of payment made under the "Reward and Recognition" incentive designed to encourage employees to drive sales and productivity.

In addition, new training initiatives are being introduced for all floor staff regardless of tenure, which will focus on ensuring sales assistants are continually trained in delivering superior customer service and ensuring staff have the skills required to promote the company's David Jones American Express card and Storecard.

David Jones is also currently tendering for a new IT solutions to support its multi-channel retail strategy, which includes its online shopping site that has over 2,5000 products on offer.

From this, the company expects sale for the first quarter of full year 2012 to be in line with the sales performance in the first quarter of full year 2011, which was approximately -10 per cent. Despite David Jones has reaffirmed for the PAT guidance for the first half of fully year 2012 to be -15 per cent to -20 per cent.

“Despite the immediate trading challenges we are facing, we are excited about David Jones’ future. Our Company is working to become a successful multi-channel retailer and we have over the past 12 months invested in many initiatives that will deliver sustainable long term growth for our business and will generate sales in ways other than through constant discounting,” Zahra said.