David Jones chief executive Paul Zahra has predicted a tough Christmas period for retailers, with the department store braced for an uphill battle.
Zahra, who spoke at the company's annual general meeting, said that while the business is “ready to tackle the macro economic conditions”, he would not underestimate the size of the challenge or difficulties ahead.
“Whilst we are building on future profitable revenue streams for our company, we are also highly focused on the upcoming Christmas quarter and meeting all the challenges that the macro environment will throw at us,” he said.
“In fact, I have just returned from a nationwide 36 store review and have personally met with each store manager, sales manager and the key frontline team members and seen all their plans for Christmas.”
According to Zahra, David Jones is also looking ahead to improve its offering in the new year, with several initiatives already in the works.
These include approximately 550 new branded concept areas, scheduled for installation throughout 2012, as well as the implementation of a new point-of-sale system.
“We have partnered with UK based PCMS to deliver a new POS system. The implementation of our new POS system is scheduled for pilot from the middle of calendar year 2012,” Zahra said.
“Some of the improved service features and enhancements that our new POS system will deliver include: faster transaction processing time, introduction of gift receipts to help our customers, touch screen technology, 'tap and go' EFTPOS transactions, and predictive cash tenders to make cash transactions quicker.”
Zahra also revealed that the department store giant is on track to improve its online operations and is currently developing new IT solutions to support its multi-channel retail strategy.
“It is our intention to be a major player in multi-channel retailing in the future and to provide our customers with the best shopping experience and range of products regardless of which channel they choose to shop from – online, in-store, mobile or a combination,” he said.
Looking forward, Zahra said David Jones is also planning to boost its bricks-and-mortar network, with four new stores scheduled for launch between financial years 2014 to 2016. The new stores will be located across Macquarie in New South Wales, Whitford in Western Australia, and Sunshine Plaza and Pacific Fair in Queensland.
The new David Jones Highpoint store in Melbourne is also expected to open for trade during the first quarter of the 2013 calendar year. The company expects the Highpoint store will generate between $50 million to $60 million per annum over time.
As previously reported in ragtrader.com.au, David Jones recently suffered a first quarter drop in sales of more than $50million. For the first quarter of the 2012 financial year, July 2011 to 29 October 2011, the listed company reported a total sales revenue of $414.3 million. Between August 1 2010 to October 30 2010 sales were $466.6million, which represents a total sales decline of 11.2 per cent for this first quarter.
According to David Jones chairman Robert Savage, total sales growth rates for the department store also dropped from +1.2 per cent in first quarter 2011 to -10.30 per cent in fourth quarter 2011, compared to the same periods in financial year 2010. He said this “dramatic drop is unprecedented in the company's recent history”.
In terms of earnings guidance, the department store has outlined it expects to post a 15 to 20 per cent decline in after tax profit for the first half of fiscal 2012.