Department store David Jones has announced a drop in total sales for the third quarter of the 2012 fiscal year, following a management reshuffle earlier this month.
The results, for the third quarter ended April 28 2012, reported total sales for the company at $399.8 million, down 2.9 per cent on the previous corresponding period. Sales on a like-for-like basis also declined, 3.1 per cent compared to last year.
However, David Jones reported that womenswear, accessories, beauty and menswear were the best performing categories during the quarter, with Western Australia and Queensland named the best performing states on an underlying sales basis.
Looking ahead, David Jones CEO Paul Zahra said that, despite the drop in sales, the company continues to make good progress in clearing excess inventory and is “on track to clear all excess inventory by the 2012 financial year end as well as maintain aged inventory levels below its five per cent benchmark”.
“While trading conditions continued to be difficult throughout the quarter we did experience a stabilisation in trading patterns with the rate of sales decline broadly in line with the second quarter of 2012,” he said.
“We were pleased by the performance of the recently refurbished Chadstone (Vic) and Warringah Mall (NSW) stores as well as the extent to which customers have embraced our new bridal offering and our personal shopping service.”
Zahra also revealed that refurbishment of the David Jones Toowong Village (Qld) store commenced in March 2012 and is due to be completed in time for the Christmas trading period. The department store is also on schedule to commence the refurbishment of the ground and lower ground floors of its flagship Elizabeth Street (NSW) store in the fourth quarter of 2012.
In addition, David Jones will launch its new full line department store in Highpoint (Vic) during the first quarter of calendar 2013 and will also commence trialling its new point-of-sale system during the same period.
The launch of the company’s new webstore is also on schedule to be launched before Christmas 2012.
Zahra was also optimistic about expectations for the fourth quarter of 2012 and reaffirmed the guidance provided by the company on March 21 2012, of a decline in profit after tax for the full financial 2012 year of between 35 per cent and 40 per cent, compared 2011 results.
“Looking forward to fourth quarter 2012 we note that the first few weeks of the quarter have traded broadly in line with third quarter 2012 trading patterns. June and July are the major contributors to sales in the fourth quarter 2012 and given our experience last year we feel it is imperative that the promotional activity during this period be highly distinguishable from other promotional events throughout the year.
“Accordingly we are making improvements to our clearance program this year and we have consciously decreased the depth, breadth and volume of promotional activity in the lead-up to clearance,” he said.
As previously reported on ragtrader.com.au, the results follow a period of instability for the department store with a raft of management heads exiting the company during the month of May, and a string of new appointments made.
Departures include non-executive director and deputy chairman John Coates and company secretary and general counsel Caroline Waldron.