David Jones’ losses over the two years has ballooned to almost A$1.3 billion ($1.4 billion), according to documents filed on the Australian Securities and Investments Commission by Osiris Holdings – an intermediary between David Jones and parent company Woolworths Holdings.
After losses of A$785.6 million in 2018, the department store chain saw an additional A$489.2 million in 2019, largely due to impairment charges over both years.
David Jones has struggled with the difficult trading conditions and lessened economic growth in the Australian market, seeing its operating profit almost halve to $37 million in FY19.
Due to the department store’s struggles Woolworths Holdings slashed David Jones’ market value to around $965 million earlier this year, following a similar cut in 2018.
However, Woolworths Holdings chief executive Ian Moir told the DailyMaverick that he believes the worst is over for the chain.
“We’ve had many bad years at David Jones and learned many lessons,” Moir said.
“We know more about the Australian consumer through fixing the David Jones business beacuse we have collected data and research about what they want. We believe the worst is over.”
According to Moir, 2021 will be a stronger year for David Jones.
The way to the consumer’s heart is through the stomach
Though David Jones’ department store offering will still make up a large part of the business’ offering, it has recently announced a number of secondary ventures related to its David Jones Food offering in Australia: a partnership with petrol provider BP, as well as a standalone food store in Melbourne.
These ventures see the David Jones brand in a different context, utilising brand equity that has been built up over decades to enter a new category, through focusing on the high end of fresh produce sector in a way David Jones managing director of food Pieter de Wet said will differentiate them from the competition.
“The IP we created over decades of working with our suppliers is what delivers those products, and over time, that’s what we see as a big opportunity that will differentiate us,” de Wet said.
This story first appeared on Inside Retail Australia.