SYDNEY: David Jones has identified ongoing brand introductions as a source of growth under the current economic climate.
In a presentation at the Macquarie Australia Conference earlier this month, chief executive Mark McInnes confirmed a number of new brands and concept areas would be introduced to the department store throughout the year.
This included collections from Mimco Shoes, Zegna Underwear and streetwear brand G-Star along with fresh installations for Marc Jacobs Accessories, Emporio Armani Accessories, Ksubi, DKNY Kids, Nudie and Olga Berg. A concept area had also been erected for Australian men's, women's and children's brand Industrie - which defaulted from rival department store Myer earlier this year and was noted as generating sales of $85 million per annum.
David Jones launched 50 exclusive brands across its portfolio last year including fashion offerings from Speedo, Canali, American Apparel, Fred Bare and Hogan. In addition to its latest brand introductions, analysts believed the company's flagship store in Melbourne would also be a key source of growth.
For the first time, McInnes revealed the Bourke Street site had generated $375 million in sales over fiscal 2008, compared with its Sydney Chatswood store which generated $100 million and average store turnover of around $50 million. The site was currently undergoing a refurbishment program which would increase selling space by 30 per cent when it opened for Christmas trade in 2009.
Macquarie Research Equities analyst Lisa Deng said the store was so integral to David Jones' sales performance, disruptions as a result of its refurbishment program had impacted overall sales for the third quarter of 2009.
Comparable sales for the period declined by 10.8 per cent, the largest decline reported in the last 10 years or 40 quarters.
"Bourke Street is one of [the company's] largest stores and as such, disruption caused by the refurbishment was estimated to have contributed two to three per cent of the decline," Deng said.
David Jones reaffirmed its guidance for net profit after tax growth of between zero to five per cent for the 2009 financial year.