Aussies are still reeling from the news that dozens of Target stores will soon shut – and it seems DJs could be next on the chopping block.
Plans to “restructure” the David Jones network are set to accelerate with the coronavirus crisis devastating sales at the already struggling retailer.
In a COVID-19 and trading update from parent company Woolworths Holdings Limited (WHL) – including David Jones and the Country Road Group – seen by news.com.au, the company indicated store closures were likely.
“Although David Jones (DJ) has continued to trade in its large format stores through the period, the impact of COVID-19 has had a significant impact on foot traffic and store sales,” the document states.
“Sales and concession sales for the first nine weeks of H2 were up 0.5 per cent in local currency but declined by 35.8 per cent in the subsequent eight weeks to end-April.
“DJ’s online penetration continues to grow strongly, with sales in H2 to-date having doubled versus that of the prior comparable period.
“The easing of restrictions in Australasia has also commenced, and we are seeing a positive uplift in footfall and a commensurate, encouraging sales performance, across the DJ network of stores.”
For more stories like this visit www.news.com.au
David Jones indicated store closures were likely. Image: Supplied.
Challenges for the industry
However, the update also included a telling line about the brand’s restructure.
“Discussions with Australasian landlords are underway in relation to an accelerated restructure of the David Jones network of stores/locations and reduction in floor space,” it revealed.
Final settlement is expected before the end on July, and “the sale price achieved is in line with expectations”.
In a statement provided to news.com.au, WHL Group CEO Roy Bagattini said the pandemic had sparked “unprecedented” challenges for the industry.
“This recent update reflects the tough and unprecedented trading conditions that have dramatically impacted performance across the retail sector globally,” Mr Bagattini said.
“Throughout this period, our group has taken proactive and immediate action to ensure the safety of our customers and employees, whilst optimising trade across all our businesses. “Notwithstanding the significant challenges we currently face as a business, we are well placed to respond rapidly and effectively to changing customer dynamics and capture the market opportunities that arise.”
Mr Bagattini said the company was “focused on the implementation of the strategic initiatives that will address the current and emerging needs of all our stakeholders”.
“By doing this we will position the business well for long-term future growth and success,” he said.
It also claimed “contracts have been exchanged between DJ and the preferred purchaser” of the Bourke Street Menswear building.