Sales at David Jones have soared under its new South African owner, which says it wants to turn the retailer into one of the world’s best.
South Africa’s Woolworths bought David Jones for $2.1 billion in 2014, and after taking control in August has significantly improved its sales performance and delivered an operating profit of $161 million.
David Jones’ last annual profit reported as a publicly listed company was $95 million, in 2012/13.
Sales grew 10.7 per cent in the six months to June, as almost 200 brands were taken off David Jones’ shelves and excess stock was reduced.
The amount of floor space dedicated to Woolworths-owned labels, including Country Road, Witchery and Mimco, was also increased.
Woolworths chief executive Ian Moir said he has big plans for David Jones, including huge improvements in customer service.
“The customer experience has got to be the best in Australia, and as difficult as this sounds we want it to be the best in the world,” he said.
“We’ll be spending a lot of money, achieving that is more important than anything else.”
New stores will also be opened, but with different formats than many customers are used to, such as the recently flagged concept store at Sydney’s new Barangaroo harbourside precinct.
“We see real growth for that business and we see ourselves driving a better relationship with the customer, driving much higher turnover, taking more market share and employing many more people,” Mr Moir said.
Plans to sell the company-owned flagship Market Street store in Sydney’s CBD and Bourke Street store in Melbourne are continuing, with the funds to be used for a major transformation of those sites once they are leased back.
“What we want to do is we want to have bigger businesses, with more on offer, more exciting environments, with a higher turnover than we currently have,” he said.
While the Australian economy appears set for challenging times, the higher income consumers David Jones is targeting are proving resilient, Mr Moir said.