DJs rejects eBay's offer of online help

DAVID JONES has rebuffed an offer from eBay to help boost its struggling internet sales.

DAVID JONES has rebuffed an offer from eBay to help boost its struggling internet sales.

The head of eBay Australia, Deborah Sharkey, confirmed the online behemoth had approached the department store about the possibility of using eBay as a way to access a wider online market.

"We approached David Jones and a number of Australian retailers," said Ms Sharkey, who refused to elaborate on the timing of the offer.

"We have openly contacted many of the major retailers offering to help build out their online strategy ... And that offer stands."

David Jones last month unveiled an ambitious $160 million "omni-channel" distribution strategy to begin selling and marketing merchandise via the web and mobile devices after years of inaction in the area. David Jones offers only about 9000 items online, a number it hopes to increase to 90,000 items by next year in order to boost sales across all digital markets.

The department store, whose first-half profits fell 19.6 per cent from a year earlier to $85 million on slumping demand and the squeeze brought on by the change in customer shopping habits, also warned full-year profits could be down by 40 per cent as it scrambles to redesign its business model.

A spokeswoman for David Jones said eBay had approached the retailer several months ago "very keen to secure access to the David Jones brand portfolio.

"We looked at the eBay option and decided it was not for us," she said.

"We couldn't see the value of teaming up with an aggregator as it only adds additional cost when the aggregator takes its margin."

Revelations of eBay's offer come after David Jones reportedly rebuffed overtures from successful online retailer Catch Of The Day late last year. Its chief, Gabby Leibovich, in turn told the Fairfax-owned The Australian Financial Review that businesses like David Jones were "fat, lazy and arrogant for too long".

Catch of the Day, with origins selling goods through eBay before striking out on its own, is on track to generate revenues of $250 million in the year to June.

EBay Australia said revenue at its top 2000 sellers rose 45 per cent over the year to January. The group said that more than 80 per cent of the sales in Australia were for new, rather than used products, higher than in the other markets where it operates.

The director of online delivery logistics company Temando, Carl Hartmann, said that large retailers like David Jones and Myer had the competitive advantage of physical store locations that allowed them more service choices than online-only retailers. Today 17 of the top 25 US online sellers were bricks-and-mortar retailers, with only four brands online-only, he said.

Want access to our latest research and new buy ideas?

Start a free 15 day trial and gain access to our research, recommendations and market-beating model portfolios.

Sign up for free