David Jones lures Myer brands in new wave of exclusive contracts

David Jones has managed to woo six new brands to its growing range of contracted designers away from its rival Myer, as the two department store giants battle it out over control for access to valuable local and foreign labels.

David Jones is expected to announce today it has signed new exclusive deals with the brands following stints at Myer.

The renewed push to secure exclusive contracts comes in the aftermath of the Myer, Kym Ellery and David Jones legal battle which saw Ellery and Myer settle the dispute in April with the designer issuing an apology. She was permitted to continue supplying her mainland collection to David Jones.

David Jones chief executive Paul Zahra revealed on Sunday six local and international brands from Myer have signed exclusive supply agreements, along with a further seven brands.

Speaking on Channel Nine’s new Financial Review Sunday program, Zahra said David Jones will be adding more international brands to its portfolio.

“They are brands like Givenchy, Joseph that are currently in the country, weren’t stocked at David Jones and they have come across to us – we are quite excited about that.

“We have just signed up Sunseeker, which is an Australian brand, Pucci, Mango, and we are in discussions with others, but we will announce those once we have done those deals,” he says.

UK children’s clothing brands Joseph and Finders Keepers are reportedly moving from exclusive contracts with Myer to exclusive David Jones contracts, according to The Australian Financial Review, while designer labels Givenchy and Pucci, which had dual distribution agreements, will now be stocked only in David Jones.

Bentley’s partner David Gordon told SmartCompany that while designers can achieve success using exclusive contracts, there are warning signs to acknowledge.

“Some of the stuff you look out for is a commitment to volumes, the margins the retailer will give you, the terms and conditions around returns and discounts, and a commitment as to where they’ll display your products and visual merchandising.

“A lot of designers don’t necessarily understand the retail relationships and requirements. They abdicate responsibility to the department stores to do the right thing by them, but they have competing priorities,” he says.

Myer told SmartCompany in a statement the company has a “broad portfolio” of brands, although acknowledged some “come and go”.

“We have a number of new exciting brands to add to our portfolio,” the company said.

SmartCompany also contacted David Jones but no reply was available prior to publication.

David Gordon says brands have always had to choose which department store better represents their brand.

“Myer has a greater volume of traffic and more stores. It’s a bigger business with more customers, so if you go with them, then you’ll be exposed to more consumers.”

“But, if you go to David Jones, you’ll be elevated to a more fashion-type position and won’t be lost in the myriad Myer brands.”

“Depending on who you are and what you’re trying to do with the brand, you’ll make that decision and it will be based on what you can extract from each of them,” he says.

Gordon says brands should consider the “competitive mix” in the department stores.

“If Myer has competitors in the same category which are less expensive, it would be more difficult for you to compete with those brands,” he says.

Gordon says a key reason designer brands go to David Jones is for the reciprocated feeling of exclusivity.

“Myer carries a wider range of brands and a broader pricing bracket, so brands perceive David Jones to be more exclusive,” he says.

Among the brands partnering with David Jones is Spanish-based label Mango. Mango will be sold in David Jones from August, but first launched in Australia in 2004 with its own store MNG, which failed to gain market traction.