- A trading update from David Jones’ owner reveals department store struggling
- Sales at their Australian stores have fallen by 5.3 per cent over the past 20 weeks
- Experts predict lower prices will be needed to bring shoppers back to the chain
- Without sacrificing margins David Jones may find it difficult to grow their sales
A plunge in sales at David Jones has experts predicting the department store will be forced to slash prices.
Woolworths Holdings revealed a 5.3 per cent fall in sales over the last 20 weeks at David Jones’ Australian stores.
The company cited margin protection, the moving forward of the end-of-winter sale and a reduction in discounting for the sales decline.
A plunge in sales at David Jones (pictured, stock image) has experts predicting the department store will be forced to slash prices
Sales also suffered due to the roll out of a new inventory management system, The Age reported.
Refurbishments at the Elizabeth Street store in Sydney’s CBD, and the opening of a food hall at its Bondi Junction store may also have been a factor.
‘Key concession brands also reduced tactical campaign activity in David Jones to reduce discounting,’ the trading update said.
Deutsche Bank analyst Michael Simotas said both David Jones and main competitor Myer are suffering from poor sales.
Woolworths Holdings revealed a 5.3 per cent fall in sales over the last 20 weeks at David Jones’ Australian stores (pictured is a stock image)
‘We continue to believe that growing sales without sacrificing margins will be difficult to achieve,’ he said.
‘Clearly the weak sales from DJs had a company-specific element to it, with the company changing inventory systems and seemingly steering away from discounting, despite Myer’s unsuccessful experience with this previously.’
Woolworths Holdings said there had been an ‘improving trend’ for David Jones in the last six weeks, and their Country Road Group saw increasing sales.
Daily Mail Australia contacted David Jones for comment.
The company cited margin protection, the moving forward of the end-of-winter sale and a reduction in discounting for the sales decline (pictured is a stock image)