Department store David Jones has revealed sliding sales for the third quarter of the 2013 financial year, despite its recent designer brand coup against arch-rival Myer.
The company confirmed a 2.2 per cent drop in total sales revenue to $391.1 million for the weeks January 27, 2013 to April 27, 2013, compared to the previous corresponding period (3Q12: $399.8 million).
On a like-for-like basis sales were down 3.4 per cent.
Commenting on the lacklustre results, David Jones CEO and managing director Paul Zahra said David Jones was affected by the warmer winter climate and the tough trading environment.
“The unseasonably warm start to winter impacted our business in particular Womenswear. Our high margin Beauty, Menswear and Childrenswear categories delivered growth for the quarter, however our overall sales performance was once again adversely impacted by our Home categories, in particular Electronics which continues to be subject to industry and price pressures,” he said.
“[However], despite the warm start to the season our winter inventory was well managed and is at lower levels than the previous corresponding period.
“We continued our strategy of reducing discounting throughout 3Q13 notwithstanding aggressive promotional activity in the market. Most notably our mid-season sale was reduced by one full week and we removed our $10 million Floor Stock Clearance event.”
Zahra added that the company does not believe that the ongoing increase in the depth and breadth of discounting in the market is sustainable, which has worked to the company's advantage.
“[It's] a view shared by many brands and as a result we have seen an increase in the number of brands looking to convert their distribution arrangements to department store exclusive agreements with David Jones. Recent additions to our portfolio that fall into this category include Givenchy, Pucci, Joseph, Finders Keepers, Gumboots and Sunseeker.
“Having said this, in the short term we expect to see heavy discounting as other retailers attempt to address excess winter inventory issues. Whilst we do not propose to match this expected discounting activity our key June Clearance will need to be competitive and we will need to maintain our marketing share of voice,” Zahra said.
Going forward, Zahra said David Jones will continue to focus on strengthening its omni-channel operations, backed by strong growth from its online division.
According to Zahra, the David Jones webstore continues to grow with online sales growth rates doubling in the third quarter of 2013, compared to the second quarter of 2013.
The company's like-for-like sales this quarter include the Canberra Centre (ACT) store which was disrupted due to refurbishment and excludes the new Highpoint (Vic) store which opened in mid March 2013.
The sales reveal follows the defection of several designer brands from Myer to David Jones in May, as recently reported on ragtrader.com.au.
The fresh additions, a mix of international and national brands, are set to join the David Jones business in August 2013, on a department store exclusive basis.