David Jones sales fall in April quarter: Midday roundup

Department store David Jones has recorded a dip in April quarter sales, falling 2.2% to $391.1 million.

The retailer also said this morning like-for-like sales dropped by 3.4% during the quarter. Shares have fallen 4.6% this morning to $2.46 following the news, but were trading at $2.49 at 11.40 AEST.

Chief executive Paul Zahra said the unseasonably warm weather had impacted on the retailer’s sales.

“Our overall sales performance was once again adversely impacted by our home categories, in particular electronics which continues to be subject to industry and price pressures,” he said.

The department store has been working on consolidating inventory and reducing costs.

“In the current environment of cautious consumer sentiment we made a deliberate decision to continue to focus on the areas of our business that we can control, namely [gross profit] margins, inventory and costs,” he said.

Zahra also said the practice of discounting was not sustainable, noting the company’s reduced sales periods.

“Our view is that the ongoing increase in the depth and breadth of discounting that we are seeing in the market is not sustainable,” he said. “This is a view shared by many brands and as a result we have seen an increase in the number of brands looking to convert their distribution arrangement to department store exclusive agreements with David Jones.”

ANZ to scrap 70 jobs

ANZ will scrap 70 jobs from its call centre and move them to New Zealand, the company has confirmed.

A spokesperson has told Fairfax that while 70 jobs would move offshore, Australia would remain the base for all call centre operations.

”ANZ advised staff in its Australian call centre last week that 70 roles will be transitioned to our call centre in New Zealand,” the spokesman told Fairfax.

”We do not anticipate the change will involve any redundancies as staff impacts will be managed over time through natural staff turnover.”

Shares down on open

The Australian sharemarket has opened lower this morning, following modest offshore leads from last week.

The benchmark S&P/ASX200 fell by 39.7 points or 0.8% to 4,943.8 at 11.50 AEST.

Cost of doing business discouraging foreign investment

The rising cost of doing business in Australia is causing large multinational companies to be reluctant about conducting business here, new research has argued.

According to The Australian, a McKinsey & Company report argues major gas export facilities have high costs driven up by workplace disputes.

The report quotes Shell Australia country manager Ann Pickard, who suggests the government only has another 18 months to help reverse the situation.