Things continue on the up and up for upmarket department store chain David Jones with the South African-owned retailer reporting an 8.4 per cent increase in sales for the year to June 26. Sales in comparable stores grew by seven per cent and net retail space grew by three and a half per cent.
The retailer has worked hard in recent times to throw off its dowdy image and establish a strong online presence. It has worked hard on its youth fashion labels, has introduced its own brands (many from South Africa) and tried to shake-off a reputation that it’s more expensive than arch-rival Myer.
This year’s result also betters 2015’s that saw a 6.4 per cent growth. In May, Myer announced it’s sales were up 2.1 per cent in the third quarter of the financial year.
Australia’s two largest department stores have faced stiff competition in recent times from cheaper, overseas players such as Zara, H&M and Uniqlo who’ve snared the youth fashion market. In May H&M announced a 50 per cent surge in sales for the May quarter and all the new players have said they have expansion plans in the Australian market.
However, it’s not going to get any easier for any of the players. Discount chains such as Big W and Target have also signalled they want to play in the more upmarket fashion and homewares space.
Last month, Wesfamers boss (owner of Coles, Kmart and Target) Guy Russo said the overseas players would regret coming to Australia as he attempted to reposition Kmart and Target.
“I’ve seen clean models, H&M, Zara, Uniqlo … they know how to do volume and fashion and do it with their own brands,” Mr Russo said. “The only thing they are not doing right is they are over-priced. If I can clean my model up they will regret making the trip Down Under,” Russo said.
Myer has also announced plans to invest $480 million in its stores and plans to increase sales by three per cent annually between next year and 2020.