David Jones Say “No” To Taking Over Myer
As Premier Investments ramp up their attack on Myer, David Jones executives, who have their own problems have come out and said that they are “not interested” in taking over Myer or merging the two iconic department store brands into one.
Woolworths Holdings chief executive Ian Moir who is currently working through problems at David Jones who last year decided to move their headquarters to Melbourne, said he had no interest in making a bid for the struggling chain.
Mr Moir told The Australian last night he was committed to improving David Jones after a “horrendous” period that saw its profitability slide by a third in the December half, and did not want to talk about reviving the failed $3 billion merger proposal initiated by Myer in late 2013.
“You know what — let’s see what we can do against the rest of the market, and against Myer, let’s focus on that,” he said.
“I want to get the business back focused on trade and the customer, and I don’t want any more talk of transformation or mergers. It’s really all about getting back to business for us. We are not interested in anybody else but our customers, our business and our brand.’’
David Jones’ profit dropped 38 per cent to $66 million in the December-half, underscoring the challenges in the department store sector as shoppers shift online and new brands enter the Australian market.
According to figures released in South Africa by David Jones’ parent, Woolworths Holdings, sales fell 3 per cent to $1.1 billion and same-store sales by 3.3 per cent despite a late rebound in the six weeks before Christmas and strong online sales growth.
Department store profits fell 30 per cent to $77 million despite higher gross margins, and earnings from financial services fell $2 million to $7 million.
Woolworths also booked costs of $27 million associated with its gourmet food strategy, new merchandise planning and e-commerce systems, and moving David Jones’ head office to Melbourne. These costs dragged David Jones’ bottom line profits down 37.7 per cent to $66 million.