David Jones Profit Plummets 50%
Luxury department store, David Jones, has post a 49.6% drop in full-year operating profit to A$64 million, following intense market pressure and an organisational re-structure. Total sales have slumped 3.8%.
The news comes as rival, Myer, continues to cut costs and slash head office jobs, under the leadership of new CEO John King.
South African parent company, Woolworths Holdings, has fallen deeper into the red, following a $712.5 million impairment charge against the carrying value of David Jones – as flagged earlier this year.
As per The Australian, Woolworths Holdings has recorded a full-year loss of 3.549 billion Rand, down from a profit of 5.448 billion Rand in 2017.
Woolworths admits Australian trading has been hard, with David Jones profit diving nearly 50%.
Notable changes include the movement of David Jones’ Head Office from Sydney to Melbourne, coupled with upgraded merchandise and finance systems, and its new in-store food area – lifting expenses 8.8%.
Despite a tough first half, David Jones sales climbed 2.2% in the second half, with comparable sales up 2.7%.
An organisational restructure is said to have slashed David Jones’ cost base by A$25 million, alongside several management cuts.
In a shock move, Woolworths Holdings has also announced David Jones will seize several exclusive brands away from Myer including; Country Road, Mimco and Politix.