David Jones profit slides 40%

Upmarket Australian department store David Jones on Wednesday announced an annual net profit slump of 40 percent as it battles falling sales and an explosion in online shopping. The troubled retail giant said its profit in the year to July 28 fell to Aus$101.1 million (US$105.6 million), with sales dropping 4.8 percent. Chief executive Paul Zahra said the result reflected "the difficult trading environment during the year as well as the investment we have made in the second half of 2012 implementing our future strategic direction plan". Under the plan, the company said it was considering ways to unlock the value of its four flagship properties in Sydney and Melbourne, estimated to be worth Aus$612 million, including their sale. "Our company remains in a strong financial position with low debt. We have a strong balance sheet, solid cashflows and ownership of our Sydney and Melbourne CBD properties," Zahra added. Stalling consumer spending had curbed demand while the growth in online shopping had also cost it business. The company's strategic plan is aimed at turning its business around, involving a bigger push into online and smaller stores.