David Jones will close half its stores. Why more could go | The Business | ABC NEWS

On Wednesday, David Jones confirmed 19 of its 38 stores will close.

Staff and suppliers of David Jones had been anxiously awaiting any updates on the fate of the department store since it went into voluntary administration last week.

While there’s no final closing date, the department store is likely to capitalise on the Christmas period, before doors shut by the end of the year.

Senior retail analyst at MST Marquee, Craig Woolford had been looking into the department store’s performance before it went into voluntary administration and said 23 stores needed to close.

He says the 19 closures are the stores with low turnover, a lot of them in shopping centres such as Westfield, and he would not be surprised if more stores close.

“It’s certainly the stores that have seen the biggest decline in sales over the years. The department stores are and were the anchors of great shopping centres and have lost that status over the last 10, 20 years,” he says.

“So the reduction in sales for those stores means that they’re just less viable to run the staffing and pay the rent.” He said.

He says there’s been a “frenzy of shoppers going into David Jones to grab a bargain”, but says that won’t be enough to save the department store in the long-term.

He says the David Jones collapse isn’t necessarily a reflection of the broader retail backdrop, or department stores such as Myer. While broadly, the retail backdrop is slowing, David Jones in particular had high levels of debt and shrinking sales, “which is obviously a nasty combination”.

“We’ve seen great sales trends in health and beauty. We see very weak sales trends in categories like footwear or liquor,” he says.
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