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David Jones Sales Slow, Luxury Spending Continues

Chief Executive of David Jones Scott Fyfe claimed trading remains positive with consumers continuing to invest in luxury brands, even though sales have slowed recently due to pressures on household budgets.

He noted “good progress” was made on sales, cost management was strong, and profits were solid during the second half. He claimed the chain reached an agreement with Scentre over several hold voer leases.

“We ended up delivering significantly ahead of our expectations. The first half was exceptionally strong. The second half, we definitely saw the impact of some interest rate hikes on consumer behaviours.”

“But all in all, FY22 numbers, we’re really pleased with and its set some really good momentum into 2024 and 2025. Sales were in positive territory, both stores and online. I think we picked up market share.”

This news comes as former owners, South African based Woolworths Holdings Ltd, revealed full year accounts making $30.9 million profit on disposing David Jones to Anchorage Capital Partners.

Woolworths garnered $10.75 million after costs, having paid over $2 billion to purchase the group in 2014.

Woolworths claimed there was a pronounced deceleration in sales for the second half. Turnover and concession sales at David Jones increased by 23.6% (comparable nine month basis), or 21% (same stores basis).

Revenues fell 11.3% in the nine months compared with 12 months during the previous year. Profit margins were inline at 35.3%.

Country Road Group is still owned by Woolworths, with sales dropping 0.6% in the second half, and growing 12% to June 25. Reduced promotions and supply chain efficiencies boosted gross profit margin to 62.2%.

Mr. Fyfe claimed higher interest rates during the last three months halted customer spending, however they were still spending on luxury brands. Father’s Day, Spring Racing, and Christmas have placed the company on a solid footing for a slower environment.

ABS data indicated spending was virtually flat at department stores in July.

He said he hopes the unexpected sharp fall meant the Reserve Bank wouldn’t raise interest rates again as the retail sector moves towards. He also said Anchorage had plans to further invest in three stores at Bondi, Burwood, and Chadstone.

Myer claimed second half sales in early August had halted, however total revenue was expected to rise 12.5% to $3.36 billion for the year to July 29. Higher profits were also expected.

Myer said in early August that second-half sales had ground to a halt but still expected total revenue to be up 12.5 per cent to $3.36 billion for the year to July 29, and profits to be higher.

Myer’s biggest shareholder, Solomon Lew now controls almost 29% of the company, and has recently shocked the market after flagging a possible demerger of Premier Investments and the exit of the CEO.

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