Unlike its rival who reported successful third quarter trading, David Jones has not been able to do the same this week.
It reported total sales for the third quarter of the financial year 2013 as $391.1 million – a 2.2 per cent decline on the same period last year of $399.8 million.
One like-for-like terms, sales were down 3.4 per cent from $399.8 million same period last year to $386.2 million this year. However, the company said these results included the Canberra Centre store which was disrupted due to refurbishments but excludes the new Highpoint store in Victoria which opened in mid-March.
The unseasonably warm start to winter also impacted the business in particular Womenswear.
David Jones CEO and managing director Paul Zahra said due to the cautious environment the company deliberately focus on controlling GP margins, inventory and costs.
“Despite the warm start to the season our Winter Inventory was well managed and is at lower levels than the previous corresponding period.
“We continued our strategy of reducing discounting throughout 3Q13 notwithstanding aggressive promotional activity in the market. Most notably our mid-season sale (Invitation Event) was reduced by one full week and we removed our $10 million Floor Stock Clearance event.
“Our view is that the ongoing increase in the depth and breadth of discounting that we are seeing in the market is not sustainable. This is a view shared by many brands and as a result we have seen an increase in the number of brands looking to convert their distribution arrangements to department store exclusive agreements with David Jones. Recent additions to our portfolio that fall into this category include Givenchy, Pucci, Joseph, Finders Keepers, Gumboots and Sunseeker.
“Having said this, in the short term we expect to see heavy discounting as other retailers attempt to address excess winter inventory issues. Whilst we do not propose to match this expected discounting activity our key June Clearance will need to be competitive and we will need to maintain our marketing share of voice.”
David Jones also reported its high margin Beauty, Menswear and Childrenswear categories delivered growth for the quarter. “However our overall sales performance was once again adversely impacted by our Home categories, in particular Electronics which continues to be subject to industry and price pressures,” Zahra said.
The omni-channel investment also continues to be a key target for the company. Its new point of sale system has been rolled out and it webstore continues to grow with online sales growth rates doubling in 3Q13 compared to 2Q13.