David Jones department store in Australia. Picture: GETTY IMAGES
David Jones department store in Australia. Picture: GETTY IMAGES

Retailer Woolworths, which owns David Jones, said on Monday that net space in its Country Road group fell by 8.1% in its half year to December 29, and further reductions are being contemplated due to rising online sales in the region.

Woolworths said on Monday the reduction of unproductive space in Australasia remained the priority, even as it reported growing market share in its core SA business, where trading space grew.

Online sales in Australasia rose 6.2% in the 26 weeks to December 29, now representing a total of 21.4% of sales in that region, the group said.

Woolworths acquired David Jones in 2014, and the group’s performance was consistently below expectations. David Jones has been written down a number of times, including a A$437.4m (R4.4bn) writedown for its year to end-June 2019.

Woolworths, which paid R21.5bn for David Jones, valued that business at about R9.65bn at end-June.

Woolworths said on Monday that group sales in its half year increased by 3.8% compared with the 26 weeks to December 23 2018.

Results have been affected by a shift in trading weeks, which gave a boost to the results reported on Monday.

The 2019 financial year had a 53-week year, meaning the important Christmas week fell into the first half of Woolworths’s current financial year, as opposed to the second half previously.

Adjusting for this shift in the trading week, sales at Woolworths Food to end December 26 2019 rose 7.8%, the group said.

“The business has maintained positive volume growth for the period and continues to grow market share,” the statement read.

The group’s results will also be affected by accounting changes, including the adoption of new rules that mean leases will be brought on to the group’s balance sheet.

Excluding these accounting changes, headline earnings per share (HEPS) are expected to fall by between 7% and 12.5%.

Including the accounting changes, HEPS will fall by between 15% and 20%, the group said.


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