Australia's two major department stores might have posted a fall in sales for the first half of fiscal 2009, but retail analysts have argued they are better positioned for the second half than their international counterparts.
Analysts at Macquarie Capital Securities equity research department said both Myer and David Jones "pulled up a good story" for the half year, despite posting a 6.4 per cent and 3.7 per cent decline in sales respectively.
Associate consumer analyst Lisa Deng said this compared favourably to the stores' international peers ? especially at cost lines.
"What is extraordinary is that both department stores experienced earnings before interest and tax (EBIT) margin expansion, with Myer also yielding gross profit (GP) margin expansion," she said. "Good inventory control, cost initiatives and controlled discounting delivered results."
Deng said department stores in the UK and US reported much weaker performances, particularly Saks which posted a 12.8 per cent fall at the GP margin and 14.07 per cent fall at the EBIT margin.
"It could not flex its inventory fast enough to respond to the escalating downturn," Deng said.
The Australian Retailers Association was also quick to note poor
department store growth for the month of February ? which saw a 9.8 per cent decline in turnover for the sector ? was not unusual, with the period being a traditionally tough one for retailers.
ARA(ARA) executive director Richard Evans said the retail market had been retracting since coming off the peak cycle last year.
"[February came] off the back of strong trade in December and January with heavy discounting during post-Christmas sales."