DJs all smiles as poll suits its clientele
David Jones is one of the few discretionary retailers to have swollen cash registers in the wake of 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.
This was thanks to certainty flowing from the change of government, a higher sharemarket and household budgets in better shape.
"September was a stand-out, so you can draw the conclusion it was driven by the election," he said. "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."
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 as a whole had all been stronger in the September quarter.
In the lead-up to the spring racing carnival, which will reach its fashion peak next week with the Melbourne Cup, David Jones had sold 200,000 dresses and plenty of women's hats. The election outcome added to people's confidence, Mr Zahra said.
"There is still a little bit of uncertainty as people are waiting to see what new policies the federal government may announce," he said.
The booming sharemarket at a five-year high had also helped consumers feel more positive about spending. But Mr Zahra warned that there still remained some uncertainty over white-collar jobs, with many consumers still cautious.
Like-for-like sales numbers, which exclude new store openings, were down 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 actually 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 since the election.
Woolworths chief Grant O'Brien said this week, after he unveiled the supermarket giant's first quarter-sales performance, that he had not seen any sales boost since the election. Wesfarmers chief Richard Goyder said a bump in sales soon after the election was momentary, with spending habits returning to pre-election levels.
Despite the poor trading conditions still in the discretionary retail sector, Mr Zahra said the business was well prepared to capitalise on the important Christmas and clearance trading periods through new merchandise partnerships, such as with British brands Harrods and Liberty.
"While it is still early days and we have to trade through the important second quarter, it is pleasing to see the company return to positive sales growth this quarter," Mr Zahra said.
The department store should also benefit from its poaching of the upmarket menswear line Hugo Boss from Myer, which is aiming for $100 million a year in sales.
David Jones' new webstore, which is a year old next week, had increased 10-fold during the quarter and had also made a positive profit contribution for the year, he said.
Across its network of department stores, NSW and Victoria had been the strongest-performing areas, with the ACT the weakest.
David Jones was now preparing for the crucial Christmas and New Year's clearance sales.
"Next week, to coincide with the launch of our new 'WOW' Christmas campaign, I will commence a nationwide store review to ensure we are well prepared, across all of our sales channels, for the Christmas and clearance trading periods," Mr Zahra said.
Frequently Asked Questions about this Article…
The federal election positively impacted David Jones' sales, with a notable increase in first-quarter sales by 2.1% to $424.2 million. The election outcome boosted consumer confidence, leading to increased spending on items like suits, dresses, and perfumes.
The federal election positively impacted David Jones' sales, with a notable increase in first-quarter sales by 2.1% to $424.2 million. The election outcome boosted consumer confidence, leading to increased spending on items like suits, dresses, and perfumes.
David Jones experienced sales growth in September due to the certainty from the change of government, a higher sharemarket, and improved household budgets. These factors collectively enhanced consumer confidence and spending.
David Jones experienced sales growth in September due to the certainty from the change of government, a higher sharemarket, and improved household budgets. These factors encouraged consumers to spend more, particularly in fashion and beauty.
David Jones' share price responded positively to the sales increase, closing 6.6% higher at $2.90, as investors reacted to the company's improved performance following the election.
David Jones' share price saw a positive reaction, closing 6.6% higher at $2.90, as investors responded to the company's improved sales performance following the federal election.
Australian fashion designers contributed significantly to David Jones' sales performance, experiencing double-digit sales growth. This was part of a broader trend of strong sales in fashion and beauty during the September quarter.
Despite the sales growth, David Jones faced challenges such as disruptions from the refurbishment of the Canberra Centre store, which affected sales momentum. Additionally, there was some uncertainty over white-collar jobs, causing consumer caution.
The spring racing carnival, particularly the Melbourne Cup, influenced David Jones' sales positively. The store sold 200,000 dresses and numerous women's hats, driven by the increased consumer confidence following the election.
David Jones' webstore performed exceptionally well, increasing tenfold during the quarter and making a positive profit contribution for the year, showcasing the growing importance of online sales.
Despite the sales growth, David Jones faced challenges such as disruptions from the refurbishment of the Canberra Centre store, which affected sales momentum. Additionally, there was some uncertainty over white-collar jobs, keeping some consumers cautious.
David Jones is preparing for the crucial Christmas season by launching a new 'WOW' Christmas campaign and conducting a nationwide store review to ensure readiness across all sales channels for the Christmas and clearance trading periods.
David Jones' new webstore performed exceptionally well during the quarter, with sales increasing tenfold. It also made a positive profit contribution for the year, highlighting the growing importance of online sales channels.
New South Wales and Victoria were the strongest-performing regions for David Jones, while the Australian Capital Territory (ACT) was the weakest during the quarter.
David Jones is preparing for the crucial Christmas and New Year sales period by launching a new 'WOW' Christmas campaign and conducting a nationwide store review. The company aims to be well-prepared across all sales channels to capitalize on this important trading period.
David Jones plans to capitalize on new merchandise partnerships with British brands like Harrods and Liberty, aiming to enhance its product offerings and attract more customers during important trading periods like Christmas.