Australian department store David Jones has reported a $74 million loss for the FY24 financial year.
This is according to the latest account filings by the company to the Australian Securities and Investments Commission (ASIC), which highlights a lift in business costs.
David Jones’ total sales hit $2.19 billion in FY24, but because the business was snapped up by Anchorage Capital Partners from Woolworths Holdings Limited (South Africa) in late 2022, the ASIC filings couldn’t give a full picture on FY23 numbers for comparison. However, WHL’s full-year report for 2022 indicates that sales for David Jones are slightly up compared to two years ago. For the 2022 financial year – April 1 to March 31 – David Jones total sales hit $2.058 billion, then down from $2.112 billion in 2021.
The department store’s gross profit was also up, hitting $768.4 million in FY24, a lift from $724.5 million reported in 2022.
However, expenses seemed to have ballooned over the last few years. In FY24, total expenses were at $717.7 million, which includes wages, lease and occupancy expenses, marketing and general admin costs. This is up from $661.1 million reported in 2022.
There were also a number of one-off costs related to the separation from Country Road Group during FY24 – another fashion business that still remains owned by WHL. Country Road Group's five key brands – Country Road, Witchery, Trenery, Mimco and Politix – have since been shifted into Myer stores.
Those expenses don’t include finance costs which alone were $151.8 million, more than double what they were in 2022 – then $70.7 million.
David Jones’ profit before tax in 2022 was then in the green at $13 million.
In the five months between January 25, 2023 to June 24, 2023, the latest ASIC filings show that David Jones reported a $289 million profit, which included a $239 million gain on bargain purchase – indicating the acquisition of David Jones by Anchorage Capital Partners was made for less than its fair value.
Despite the overall loss, David Jones generated a positive operating cash flow of $49.5 million, up by $20 million on last year, with a positive EBITDA of $203.3 million – down from $368.3 million in 2023.
The filings also confirmed that David Jones – formally ACP Riley Street Group Pty Limited – had entered into a new finance agreement, with the facility limit increasing to $190 million.
Availability of $150 million of the facility is also subject to a borrowing base percentage, the filings reported, which limits borrowings to a percentage of certain assets available as security.
“Based on its forecast, the group [David Jones] is expected to have sufficient cash and access to undrawn facilities to continue to meet its debts as and when they fall due and the group expects to comply with its loan covenants for at least 12 months from the date of issuing these financial statements,” the filings read.
“As such, the directors have prepared the financial statements on a going concern basis.”
A spokesperson from David Jones told Ragtrader that FY24 was a year on investment and consolidation, which has since culminated in the launch of a retail media arm, a new mobile app, and the revised soon-to-be operational loyalty program that is set to include Qantas Frequent Flyer.
“The focus of our investment strategy was innovation and how we evolve our platforms, offerings, and experiences to meet the needs of a modern customer in the future," they said.
“Several stores were the subject of refurbishments during this period including Bourke St, Chadstone, Burwood, Bondi, and Chatswood, putting them temporarily offline during these works. This, combined with a substantial rise in the overall cost of doing business driven by inflationary pressures, had an impact on performance.
“To support the Vision 2025+ strategy, the business has secured a new debt-financing facility and is progressing toward a refreshed capital structure, investing $250 million to support key transformation initiatives, which has significant momentum as evidenced by the successful launch of the mobile app and last week's loyalty announcement."