David Jones To Shrink Stores As Profits Fall
Department store David Jones is set to shrink the size of its stores across the country as the chain's profits continue to fall.
The profit of David Jones has almost halved in the last financial year from $64 million to $37 million according to new figures released on Thursday evening. Now the department chain is set to negotiate with its landlords in response to the consumer spending slump and the increasing move to online retail.
According to the Sydney Morning Herald, Woolworths Holdings will reduce the floor space of some of its 47 nation-wide stores by 20 percent. This will reportedly be completed by 2026.
"We've got to get less stores and less space in the lower demographic areas, we've got to exit any marginal or undesirable leases," Woolworths Holdings chief executive Ian Moir told the SMH.
Moir also said Woolworths Holdings will aim to be "more aggressive" with landlords so they are able to compete in an increasingly volatile market. The smaller stores will see some brands removed, others introduced as well as entire departments rearranged.
Competitor Myer announced similar downsizing changes in its central Melbourne store. The prestigious Emporium section will be closed save money on rent, the retail giant said earlier this month. The Emporium will be converted into a co-working space.
Myer will be scaled back to its Bourke Street location in Melbourne's CBD.
This latest change comes as David Jones announced it would cut 120 jobs in July. The roles were to be culled from both the company's head office and stores with the redundancies to be 30 from its headquarters and the remaining 90 in stores.
At the time, David Jones said the cuts were a direct result of a "challenging time for retail". The job cuts reportedly came as a shock to employees.
David Jones' redundancies were just one of a spate of recent cuts from various Australian brands. In the last few years, brands including SurfStitch, the Aussie branch of Topshop, Marcs, David Lawrence, Payless Shoes, Herringbone and Rhodes & Beckett all fell to the pressure of the Australian retail market.
Last year, men's fashion retailer Roger David announced it was in voluntary administration.
Make-up brand Napolean Perdis announced its collapse in January 2019.
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