DJs turns off music as sales slip

Date
    February 14, 2013 


David Jones will stop selling DVDs, music and video games as part of a move to exit low-performing categories, as the retailer reported a 1.4 per cent drop in total sales revenue to $590.1 million during the Christmas season.    

Shares dropped 1.5 per cent to $2.64 in early trade.

David Jones chief executive and managing director Paul Zahra said the results for the quarter, which included the Christmas period, reflected growth in high-margin categories such as womenswear, beauty and accessories.

But he said that the company's sales performance was "adversely impacted" by products in the home categories such as electronics.    


"Our focus is on improving the profitability of sales. We are exiting the low-performing categories of DVDs, music and games.

"We also continue to reduce the depth and breadth of our promotional discounting events and continue to work on changing our category mix to increase focus on higher margin categories."

Sales revenue for the six months to December was down 0.7 per cent to $1 billion from the previous corresponding period.

The second quarter of sales revenue stretches from October 28, 2012, to January 26.

Last year, the department store’s departing chairman Bob Savage said the firm was expecting flat sales during the holiday period, with consumer sentiment remaining weak despite the Reserve Bank’s interest rate cuts in October and December.    

Mr Zahra said at the David Jones' shareholder meeting in November that consumer sentiment was the company's biggest drag on performance.

Read more: http://www.theage.com.au/business/earnings-season/djs-turns-off-music-as-sales-slip-20130214-2ee8q.html#ixzz2KpFrmzww

I never even knew that they sold "DVDs, music and video games".   

International companies often offer products at a much higher wholesale price in Australia than they do in the US and the UK. DJ has been in heavy negotiation to get the Australian price of so-called "beauty products" down so that they can compete with the internet.

In the case of CDs and the like, they may have decided that the available revenue just isn't worth the fight. Whoever thinks of DJs when they want to buy a CD, an iPad or a phone? If you are not in the top three in the market, it makes sense to exit the business.