David Jones charts future with new flagship
The upmarket department store unveiled plans to create a world class retail offer in a redevelopment of its Elizabeth St. flagship on Wednesday, announcing that it had inked exclusive deals with Louis Vuitton, Gucci and Chanel to open concessions in the store.
It is hoped that a $200 million redevelopment of the long-standing flagship will serve as a “shining beacon” for the struggling business, which chief executive David Thomas said on Wednesday had been caught up in a wave of disruption and needed to fight back.
“Customers are more informed and have more choice than they ever had,” Thomas said. “That’s not going away.”
Its a tumultuous time for DJs, with South-African based parent Woolworths Holdings forced to book a $712 million write down on the value of the department store earlier this year, amid lacklustre sales.
But Thomas, who now reports directly to Woolworths boss Ian Moir following a management shake-up in May, is confident DJs can deliver a satisfactory return to its African parent, and believes the redevelopment will serve as the basis for a turnaround in the company’s fortunes.
While emerging online players and international fast-fashion giants are taking share from traditional retailers, Thomas said combining the best local and international brands under one roof was a compelling proposition.
“[Department stores] are the mall without a shop front,” he said.
“It’s far less intimidating than walking into any specialist store and far more convenient.
“That’s our ability to fight back, that’s the role the department store needs to play.”
Lighting a “shining beacon”
The ambitious development isn’t expected to be completed until 2022 and will “touch every part” of the 91-year-old store, transforming it from eight to twelve levels by implementing six product “worlds”.
Floors currently being utilised for staff and storage will be converted in the renovation, freeing up space for three levels of women’s wear, two levels of men’s wear, dedicated beauty and footwear floors, a homewares and food offer in the basement and a children’s offer on the top floor.
Bars and cafes will also be opened, with drinks to be offered on balconies overseeing “shoe heaven” on level seven.
Thomas said the store would serve as a “shining beacon”, around which the business could right size its national model to provide a more compelling and localised offer to customers across the country.
Success will increasingly be defined by tailoring DJs offer to suit individual catchments, with luxury playing a larger role in CBD stores like Barangaroo, while private label would be harnessed to suit preferences in areas like Macarthur.
“Bringing the right brands in at the top end actually solidifies everything right through the business,” Thomas said.
“Being able to create an experience that has Louis Vuitton, but also had Country Road, Witchery and Seed all working together … is a very important to our strategy.
“Great international department stores essentially have all those great luxury brands, but they also have all those middle or premium middle brands,” he continued.
Additionally, with more than 3,000 new full time roles introduced into the business recently there will be a renewed focus on in-store service.
The Elizabeth St. store will be primarily staffed by DJs own sales people, who will be specialised in whatever category the floor they work on is dedicated to.
Thomas said service was fundamental to the future success of the business and would be a key point of focus for management nationwide in the coming years.
Rival Myer has come under fire in recent years over claims that its stores lack adequate levels of in-store service, and has been working with its third party suppliers to improve customer experience in recent months.
DJs ‘right sizes’
DJs store size will also be considered, amid unprecedented pressure on local department stores to address lacklustre sales productivity as escalating rents and declining sales make legacy portfolios increasingly unsustainable.
Myer has already announced plans to close three stores, while Wesfarmers-owned Target is disposing of 20 per cent of its selling space over the coming years.
But Thomas said DJs had “no immediate plans” to close any of its 40-plus stores and would instead cut space where appropriate, so long as stores remain profitable.
“It’s a commercial reality – if we’re not making money why be there,” he said.
While Elizabeth St. is a large store, others locations such as the DJs in Barangaroo that was opened in 2016 have been designed as boutique offers that provide a carefully curated selection supported by a more robust click and collect offer.
Thomas said on Wednesday that clicks to bricks was serving as a key part of the company’s strategy moving forward, providing much needed flexibility that allowed it to open better performing stores without disappointing customers.
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