Department store David Jones has clawed its way back into the black, according to a report in The Australian, after posting its first net profit since 2018.
Accounts lodged with ASIC by David Jones’ holding firm Osiris Holdings tell of a healthy net profit of $83.4 million for the 52 weeks to the end of June, compared to a loss of $125.9 million for the same period a year prior.
The main reason for this turnaround, according to The Australian, is the end of a string of annual impairments and costs which have dragged the business’ profits down for years – such as a 5-year, $200 million refurbishment of its Elizabeth Street flagship – as well as the abating impact of the Covid-19 pandemic.
$70 million in JobKeeper and other government wage subsidies also played a major part.
The return to form will come as welcome news to parent company Woolworths Holdings, whose former CEO Ian Moir said that the business “overpaid” for the David Jones business and that it hadn’t lived up to their expectations.
Current Woolworths Holdings boss Roy Bagattini has also been critical of the department store business, noting its Food arm had failed to transition fast enough and that, while its David Jones Food convenience centers were progressing well the larger format food halls were trading at a loss.
The Food business underwent a review in 2020, which led to the decision to end its efforts toward targeting the convenience shopper and instead refocus on its food halls.