David Jones' new chief executive Erica Berchtold used her first public address since being appointed to the role to stress the importance of supply chain to the department store's turnaround plans.
Berchtold became David Jones CEO two weeks ago, moving up from the chief commercial officer role to replace Scott Fyfe, a change announced alongside a new financing facility with UK lender Hilco Capital. She has flagged a shift in the retailer's focus toward fashion and online luxury growth, alongside plans to modernise the department store model.
Speaking on day one of CeMAT Australia 2026, Berchtold said operational efficiency was as important to the customer experience as the product itself. She joined Prological managing director Peter Jones on the stage.
"There's as much beauty in the movement of inventory in and out of a distribution centre, and onto to the customer, as there is in the product itself," she said. "If you can get that humming and efficient, that is as beautiful as the dress you're selling. It's a mantra I live by now."
On the pressures facing retailers, and the limited room for error as she takes on the turnaround, Berchtold said there was little margin for mistakes.
"The retail landscape is littered with supply chain horror stories," she said. "Margins are getting tighter, cost of doing business is increasing, and customers have cost-of-living pressures. This needs to be a seamless and efficient part of your business."
Jones, who facilitated the discussion and has worked alongside Berchtold across three companies over more than a decade, said the discussion underscored how central the supply chain will be to David Jones' future.
“Supply chain, highly automated warehouses can run into hundreds of millions in capital, so you need an appetite to prepare and problem solve,” Jones said. “Supply chain is critical to retail strategy, not as a back-of-house function, but as a driver of the bottom line."
Erica then told the crowd that she wants to know the challenges, the problems and the risks, but that she also wants to know the solutions.
Looking ahead, Berchtold pointed to data, AI and forecasting as the next frontier for retail supply chains, describing inventory management in fashion retail as a balancing act.
"You've got to be very Goldilocks when it comes to inventory, particularly in fashion retail," she said. "Not too much, not too little, just right. Being able to forecast better and make better decisions for future orders is really important."
Berchtold drew on her earlier tenure as CEO of The Iconic, where she said supply chain constraints during a period of rapid online growth forced a rethink of trading priorities.
"We hit a point where we couldn't get another unit into our warehouse, and because of that, we couldn't get another unit out," she said.
"In our weekly trade meetings, supply chain would get the last minute of the conversation. We realised that needed to flip. If you can't get product in and out of your distribution centre, it doesn't matter what marketing you do or what customers want, you can't deliver it. So, we put supply chain at the start of the meeting instead of the end."
She also cautioned against treating automation as a fix-all for capacity issues, recalling a lesson from The Iconic's own rollout.
"What we found was the automation wasn't the problem, our processes were," she said. "We were using a system designed for fast-moving product as a storage facility. Have a look at your processes before you look at the system or the equipment."
Berchtold leads David Jones as the department store pushes through a turnaround. The retailer recently reported a 325 per cent jump in EBITDA for the nine months to March 2026, in a release that followed the completion of a $190 million refinancing deal.
The earnings lift is said to be driven by the return to trade of refurbished stores, alongside cost efficiencies and high-margin growth, following the completion of a $250 million transformation strategy.
The earnings improvement was accompanied by a 3.6 per cent lift in total sales, and comes after the department store reported a $95.5 million pre-tax loss in FY25, slightly higher than the $74 million loss reported in FY24.