David Jones is set to reduce 31,000 square metres of floor space by 2022, as it struggles with falling profits.
In an interview with the Sydney Morning Herald, CEO Ian Moir said the department store had reached agreements with key landlords to rationalise its network.
David Jones will axe 31,000 square metres of floor space by the middle of 2022 as part of its longer goal to cut its 486,000 square metres of floor space by 20 per cent to 390,000 by 2025.
In the interview, he also revealed concerns over falling tourism and sourcing delays due to the coronavirus outbreak.
“It is pretty tough out there,” Moir said. “It’s still promotional, still competitive, and they’ll be more businesses that will go out of business and there will be more structural change.”
“So it’s not going to get any easier.”
For the December half, David Jones operating profit fell 57.4% down to $20 million due to a number of external and internal factors.
These inlcuded the bushfire season, increased promotional activity, stagnant wage growth, increased competition and a fall in foot traffic and sales.
Sales on a comparable basis fell 0.4 per cent while gross margin declined 2.9%.
Meanwhile, online sales at David Jones increased 61.8% for the half year.