David Jones was founded in 1838 and is claimed to be the oldest continuously operating department store in the world still trading under its original name.
DJS currently has 38 stores, located in most Australian states and territories. While its main business is retailing, the company also makes money from ancillary services such as running its own credit card.
David Jones’ main department store rival is Myer, and DJS recently confirmed MYR made an approach late last year regarding a possible merger between the two department store giants.
Latest sales results
The company released 2Q14 sales results last week, which showed some positive signs.
DJS saw increased foot traffic across its stores, and average purchase sizes also rose.
The retailer’s key product categories such as womenswear, menswear, homewares all recorded positive sales growth.
The company also completed its exit of underperforming categories such as outdoor furniture, music and DVDs
Overall, sales rose 4.7% to $618.1 million, with like-for-like sales (adjusting for changes in store numbers) up 2.1%.
Encouragingly, both overall sales and like-for-like numbers were ahead of expectations.
While it still only makes up a tiny portion of DJS’s overall sales, online sales were up 150% for the quarter, highlighting the long-term potential of this division.
The company’s management has been in the headlines for the wrong reasons recently, with two directors accused of inappropriate trading in DJS shares. The two directors bought DJS shares shortly after the MYR approach and only days before DJS jumped higher on a strong 1Q sales report.
Those two directors have since stepped down, as has the company’s chairman who approved the share purchases. To top it all off, the company’s well-regarded CEO Paul Zahra has previously announced his intention to resign from the company.
Despite the recent resignations, this can be seen as a positive sign as DJS’s board lacks extensive retail sector experience and this could provide the opportunity to add some much-needed industry expertise. There is also talk that Mr Zahra will stay on as CEO or take over the soon-to-be vacant Chairman role.