After a busy few weeks in the spotlight following talks of a merger with rival department store Myer, David Jones has today released its half-yearly sales results, posting a positive performance in its bricks and mortar business and strong growth in online sales.
Christmas proved a winner for the retailer, with the second quarter of the 2014 financial year (27 October 2013 to 25 January 2014) showing a 4.7 per cent year-on-year increase in total sales from $590.1 million up to $618.1 million. Like-for-like sales also climbed to $602.2 million during the quarter, up 2.1 per cent on the previous year; excluding the electronics category, like-for-like sales were up 3.6 per cent (David Jones entered into a Retail Brand Management Agreement with Dick Smith on 1 October 2013, bringing DJs' electronics business under Dick Smith control and affecting like-for-like sales).
Across the full first half of the 2014 financial year, total sales were up 3.6 per cent year-on-year, climbing to $1.04 billion, while like-for-like sales edged up 1.1 per cent to $1.02 billion.
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The biggest jump in David Jones' results was in its online business. After re-launching its transactional website at the end of 2012, the company was able to compare year-on-year results for online for the first time in 2Q14, measuring a 150 per cent increase in sales.
"The continued growth of this sales channel reflects the popularity of the additional functionality of the site including the 'click & collect' and the online gift registry capabilities," David Jones commented in its results release today. "The company's webstore operated robustly and uninterrupted throughout the all important Christmas and clearance trading periods."
Also performing well in terms of categories were homewares, apparel (including womenswear, menswear and childrenswear), beauty and shoes and accessories. While some categories have struggled for DJs, the company also exited "low productivity" categories such as music, DVDs and outdoor furniture during the quarter.
David Jones CEO Paul Zahra commented and the positive and negative aspects of the business over recent months:
We were pleased to see growth in both foot traffic and basket size this quarter which enabled us to return to positive LFL [like-for-like] sales growth.
Whilst the sales growth experienced by the company in 2Q14 was pleasing we did experience aggressive discounting in the market pre Christmas, in particular in Womenswear. We expect this aggressive discounting to continue in 2H14.
This quarter we were able to capitalise on the Future Strategic Direction Plan initiatives we implemented over the past two years. We continue to make good progress in the roll-out of our Plan which will enable us to leverage improvements in consumer sentiment and trading conditions.
