SYDNEY — Australian department store David Jones saw significant growth in fiscal 2021, with adjusted operating profits surging 282 percent to 84 million Australian dollars for the year, or $61 million at average exchange for the period. Gains were fueled by reductions in costs, markdowns and debt, improved inventory and government wage subsidies and rent relief.
On Thursday, the retailer’s South African parent, Woolworths Holdings Ltd., reported David Jones’ sales grew 2.3 percent to 2.1 billion Australian dollars, or $1.51 billion in the 52 weeks to June 27 2021, with like-for-like sales up 0.9 percent over the period and a 17.1 percent jump in second-half sales — after falling 17 percent in the same period last year.
Online sales grew by 24.4 percent, contributing 17.3 percent to total sales for the year.
In line with the company’s previously announced strategy to exit unproductive space, trading space was further reduced by 6.3 percent over the year.
Sales in the retailer’s Elizabeth Street, Sydney flagship — on which a 200 million Australian dollar refurbishment was completed in late 2019 — grew by 16.6 percent during the year, in spite of lower footfall in the city’s central business district due to COVID-19 disruptions.
In December 2020, David Jones sold the Elizabeth Street flagship for 504.4 million Australian dollars, or $379.7 million at that time, with an initial 20-year leaseback agreement and further renewal options. Five months prior, the company’s Bourke Street, Melbourne men’s store was sold for 120 million Australian dollars, or $84 million.
Subsequent to the sale of the properties, David Jones repaid and canceled all its long-term debt facilities, including 300 million Australian dollars, or $216.2 million in bonds.
David Jones’ stablemate, Country Road Group, also delivered strong results.
Adjusted CRG operating profits surged 158.3 percent to 155 million Australian dollars, or $111.7 million, on sales of 1.05 billion Australian dollars, or $756.8 million, up 13.5 percent over the period, with a 15.3 percent rise in like-for-like sales and second-half sales growth of 39.5 percent.
Country Road Group’s online sales grew 30.7 percent, contributing 29.7 percent to total sales, while trading space was reduced by 2.8 percent.
According to Woolworths’ 2021 results announcement, “In Australia, stronger economic fundamentals, improved consumer confidence and restrictions on international travel, supported inward-focused consumption and buoyed retail spend. This was despite the intermittent snap lockdowns across major cities and an extended three-month lockdown in the state of Victoria during the first half of the current year and a further lockdown in the last quarter. Footfall in central business districts and airport locations remains well below pre-COVID-19 levels.”
Fiscal 2022 is off to a rocky start, however.
Seventy percent of David Jones and Country Road Group stores are temporarily shuttered under lockdown orders in the states of NSW, Victoria and the Australian Capital Territory — affecting some 15 million people, which is more than half the Australian population — due to an escalating COVID-19 outbreak that began in Sydney in late June.