David Jones Limited (ASX: DJS) announced its second quarter 2014 results covering the period up 25 January, revealing like-for-like sales revenue of $602.2 million, or a 2.1% gain from Q2 2013. The period covers the pre and post-Christmas sales, and gives a glimpse into how retailing is progressing during the year's busiest shopping season.
All its key categories of womenswear, menswear, beauty, shoes & accessories, childrenswear and homeware racked up sales growth increases. During the period its electronics category was changed to a retail brand management agreement. It is overseen by Dick Smith Holdings Ltd (ASX: DSH). If that category was removed from calculations, the like-for-like sales figures would be 3.6% up for the quarter.
The quarter was also a test for its online sales website, which was relaunched in November and the result was a 150% increase in sales. It operated uninterrupted through the holiday season, in contrast to the troubled Myer Holdings Ltd (ASX: MYR) site, which was down on Boxing Day and stayed down for about a week afterwards.
David Jones even added more "online-only" sales promotions to take advantage of its competitor's misfortune.
With these second quarter figures, the first-half results are clearer. 1H total sales came to $1.042 billion, up 3.6% from the previous corresponding period and like-for-like sales were a tighter 1.1% increase.
The company has also made changes in its sales categories by exiting music and DVDs and outdoor furniture, which were cut because of low productivity. It is also rethinking the actual store size that it needs taking into account the trend toward online sales.
Foolish takeaway
The age of sprawling stores is giving up to small space specialty retailing. However, one thing that David Jones, as well as Myer, have on their side is the real estate that its stores currently take up.
Reducing store needs would allow it to free up extra space for specialty retail or other commercial development, creating other income channels, so watch this retail space to see how it can grow further and possibly raise its margins.
