David Jones rides coat-tails of Coalition victory with sales jump
David Jones is one of the few discretionary retailers to have swollen cash registers after the election in the midst of continued gloom elsewhere in the sector.
Chief executive Paul Zahra said first quarter sales were up 2.1 per cent to $424.2 million and September had been a good month for the business with certainty flowing from the change of government, a higher sharemarket and household budgets in better shape all contributing to improving sales.
"September was a standout, so you can draw the conclusion it was driven by the election but, as most people know, 78 per cent of our stores excluding CBD locations sit in Coalition seats, so that's got to be favourable to the company," he said.
Investors have pounced on the company's shares, which closed 6.6 per cent higher at $2.90. Mr Zahra said its range of Australian fashion designers was experiencing double-digit sales growth, while fashion and beauty had all been stronger during the September quarter. In the lead-up to Spring Racing Carnival, which peaks next week with the Melbourne Cup, David Jones had sold 200,000 dresses and plenty of ladies hats.
"[The election outcome] adds to people's confidence, what we know is general households, their balance sheets are healthy but there is still a little bit of uncertainty as people are waiting to see what any new policies the federal government may announce," he said.
The booming sharemarket, at a five-year high, has also helped consumers feel more positive about spending. But Mr Zahra said there remained some uncertainty over white-collar jobs with many consumers still cautious.
Like-for-like sales numbers, which exclude new store openings, were down slightly by 0.3 per cent. David Jones said disruptions caused by the refurbishment of the Canberra Centre store had cost it some sales momentum during the quarter, and excluding store works comparable sales rose 0.6 per cent.
The September quarter was the first positive growth for the department store in three quarters. Total sales in the fourth quarter were down 1.3 per cent, or down 2.9 per cent on a like-for-like basis.
Other retailers have not fared so well. Woolworths boss Grant O'Brien this week said after he unveiled the supermarket group's first quarter sales performance that he had not witnessed any sales boost after the election. Wesfarmers CEO Richard Goyder said a bump in sales after the election was momentary with spending habits returning to pre-election levels.
Mr Zahra said the business was well prepared to capitalise on the Christmas and clearance trading periods through new merchandise partnerships with British brands Harrods and Liberty.
Frequently Asked Questions about this Article…
The Coalition election victory positively impacted David Jones' sales, with first-quarter sales rising by 2.1% to $424.2 million. The election outcome boosted consumer confidence, leading to increased spending at David Jones stores.
The Coalition election victory positively impacted David Jones' sales, with first-quarter sales increasing by 2.1% to $424.2 million. The election outcome boosted consumer confidence, leading to a surge in purchases of suits, dresses, and perfumes.
David Jones experienced a sales boost after the election due to increased consumer confidence, a higher sharemarket, and improved household budgets. The majority of their stores are located in Coalition seats, which likely contributed to the positive sales performance.
Several factors contributed to David Jones' sales growth, including the change of government, a higher sharemarket, and improved household budgets. These elements combined to create a more favorable environment for consumer spending.
David Jones' fashion and beauty segments performed strongly during the September quarter, with Australian fashion designers experiencing double-digit sales growth. This was partly driven by the lead-up to the Spring Racing Carnival.
No, not all retailers experienced a sales boost after the election. While David Jones saw an increase, other retailers like Woolworths and Wesfarmers reported no significant sales boost, with spending habits returning to pre-election levels.
The refurbishment of the Canberra Centre store caused some disruptions, leading to a slight decline in like-for-like sales by 0.3%. However, excluding the store works, comparable sales rose by 0.6%.
David Jones' fashion and beauty segments performed strongly, with Australian fashion designers experiencing double-digit sales growth. The lead-up to the Spring Racing Carnival also contributed to increased sales of dresses and hats.
Despite the sales increase, David Jones faces challenges such as uncertainty over white-collar jobs and cautious consumer spending. Additionally, there is some uncertainty regarding potential new policies from the federal government.
The refurbishment of the Canberra Centre store caused some disruptions, leading to a slight decline in like-for-like sales by 0.3%. However, excluding the store works, comparable sales rose by 0.6%.
Other retailers, like Woolworths and Wesfarmers, did not experience the same sales boost as David Jones after the election. Woolworths reported no sales increase, while Wesfarmers noted that any sales bump was momentary.
David Jones is well-prepared for the Christmas trading period, with new merchandise partnerships with British brands Harrods and Liberty. The company aims to capitalize on the festive season and clearance trading opportunities.
David Jones is well-prepared for the upcoming Christmas and clearance trading periods. They have established new merchandise partnerships with British brands Harrods and Liberty to capitalize on these opportunities.
The booming sharemarket, reaching a five-year high, helped boost consumer confidence, encouraging more spending at David Jones. This positive sentiment contributed to the overall sales growth for the department store.
David Jones saw positive growth in the September quarter, marking the first positive growth in three quarters. However, total sales in the fourth quarter were down by 1.3%, or 2.9% on a like-for-like basis.
Despite the sales increase, David Jones faces challenges such as uncertainty over white-collar jobs and potential new policies from the federal government. These factors may impact consumer confidence and spending in the future.
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