Dick Smith Sinkhole Drags Down David Jones Sales Growth 4%
David Jones’ South African parent company, Woolworths Holdings, has seen its sales growth slip 4% for the first half of the 2016/2017 financial year dragged down by the collapse of Dick Smith.
Issuing an update to the market last night, the company said that “David Jones’ growth was affected by the timing of Boxing Day, which falls into the second half of this year as well as last year’s termination of the Dick Smith electronics concession.”
They say the latter is believed to have cost the company 1.6% in potential sales while the former hit their bottom line for another 2.7%.
Dick Smith arranged a concession-style partnership with David Jones in 2013 that saw the consumer electronics retailer sell product from directly within David Jones locations.
Reports say that even prior to the collapse of Dick Smith, the arrangement left David Jones execs unhappy.
Country Road sales were also down, falling 0.9% on the previous year.
This comes as yet another blow for Country Road, who have been plagued by operational issues in recent years and appointed three CEOs since 2014.
The silver lining here is that both the omission of Boxing Day sales and the financial hangover from Dick Smith are one-off events, leaving analysts hopeful that sales growth will bounce back in the second half of the financial year.