NATIONAL: David Jones has heeded economic doom and gloom forecasts, downgrading its sales guidance for the second quarter of the fiscal year and terminating 150 positions in its head office.
The Sydney-headquartered department store has budgeted like for like sales to be -10 per cent versus the -7.5 per cent it issued in November 2008.
The company has also set internal like for like budgets at between -3 per cent and -5 per cent for the first half of fiscal 2010.
In a statement to shareholders, the company said this would equate to six negative quarters and was "unprecedented" over the past 20 years. David Jones CEO Mark McInnes said by setting conservative sales budgets, the company would be in a better position to manage its inventory and variable costs.
In a bid to cope with deteriorating trading conditions, the company would also reduce its head office and administrative support numbers by 150 by the end of the month.
Despite two quarters of negative sales, the company said it had been a net creator of jobs in the first half. This included 250 jobs in its new Doncaster store and retaining 60 staff from the closure of its Claremont store.
McInnes said despite the downgraded forecasts, David Jones was in its strongest position since listing in 2005. This included "exceptionally" strong cash flows, tightly managed inventory and reductions in the cost of doing business.