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David Jones Reports Significant Profit Loss
In the Woolworths Holdings Limited annual report, the David Jones’ FY17-18 results have stated numbers that would make their competitor Myer very happy.
David Jones have had a big year. They’ve spent $200 million of their own money in refurbishing their Elizabeth Street flagship store, they’ve transformed their online platform to drive their online sales and they’ve spent money on repositioning their food business. All investments to work towards a sound future for the department store giant that has surpassed their competitor Myer for the past few years.
David Jones’ gross profit was $820million for this financial year, the same as FY17, but their expenses are up, meaning the company has recorded a 58.3 percent profit loss for FY18, totalling $45million compared to $108 million from last year. Their total expenses costs were up 8.8 percent totalling $775 million.
The business’ expenses this year went into major transformational initiatives such as the Elizabeth street refurbishment and the online platform overhaul. Store costs were up 6.5 percent from FY17 at $623 million, most of which was impacted by new store openings.
So whilst the business records these losses, they are actively investing in initiatives to safeguard their future; with a goal to enhance the digital experience to deliver online sales of 10% by 2020. The investment into the Elizabeth Street Flagship store is with the goal to create a world-class department store. Plans for the store include a luxury ‘shoe heaven’ floor and immersive children’s world, planned for opening in December 2018. Both of these unique new offerings are underpinned by exclusive brand partnerships with Louis Vuitton, Gucci, Chanel and Disney as a way to create a premium customer experience.
Continuing to look towards the future, David Jones plans to relaunch their loyalty program with new member reward benefits and regular exclusive offers a part of the plan.
David Jones have also secured key exclusive arrangements with international luxury houses and leading Australian designer brands such as Louis Vuitton, Chanel, Gucci and Givenchy, Scotch & Soda, Nautica, Loewe, Kenzo, Isabel Marant, Burberry Beauty and Christian Louboutin Beauty.
As of September 2019 CRG brands Country Road, Mimco and Politix will be exclusive to David Jones.
Whilst the numbers don’t ignite a lot of confidence, their investments do and we will watch this space closely to see what is in store for David Jones come FY2019.