David Jones $487 Million Loss
David Jones has posted a full-year loss of nearly $500 million in 2019 due in part to impairments, and tax losses of almost $1.3 billion over the last two years.
As reported by The Australian and Financial Review, Woolworths Holdings, the South African retailer that owns David Jones wrote down the department store by $437.4 million after it had conceded challenging trading and sale downturns.
Onerous leases resulting in an additional provision of $22.4 million were also identified by David Jones.
It is a considerable loss for the South African retailer, which purchased David Jones for $2.1 billion in 2014, and is now worth a mere $965 million.
David Jone’s operating profits for 2019 were almost cut in half from $64 million to $37 million, with sales slipping to $2.19 billion by 0.8%.
A total net loss of $1.27 billion was recorded in the last two years by David Jones, according to Osiris Holdings accounts.
Woolworths Holdings chief executive Ian Moir, and acting David Jones boss, believes the worst is now behind them, with a $400 million refurbishment of its flagship Elizabeth Street store in Sydney which is expected to produce $50 million in profit for the struggling department store chain.
However, with staff numbers falling 275 to 7609 in 2019, the question remains whether David Jones will be able to break through to the other side.
It comes just after the announcement of the David Jones Bourke Street store closure, to make way for a single-store premium experience at its sister store.
With Myer recently opening its new look Sydney flagship department store and posting a profit of $38.85 million (an increase of 2.2%), the David Jones rival will need to fight hard to ensure they do not go extinct as many are predicted.
Mr Moir even suggested there is room in Australia for only one high-end department store, though as Myer moves closer to the premium end of the market, DJ’s will need to watch out.