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David Jones Financial Performance

In: Business and Management

Submitted By bazza1975
Words 2595
Pages 11
Executive Summary
David Jones is an iconic Australian retailer, opened in Sydney 1838. This report considers the 2013 Annual Report and the financial performance for 2012 and 2013.
The company operates in the retail trade sector with operations focussing on Department Stores (representing approximately 65% of earnings) and the associated Financial Services (representing approximately 35% of earnings). The department store sector is slowly declining as consumers move a larger portion of their household spending into online sales. Additionally, the incumbent stores (David Jones and Myer particularly) are being challenged by the arrival of well financed international competitors to the Australian market.
The company has taken some strong leaps to maintain market share including building an Omni Channel capability, improvement in inventory management, reduction of its already low debt and working with suppliers to harmonising pricing.
The report considers the financial performance of the company through the evaluation of financial ratios for profitability, efficiency, productivity, solvency and market performance. Overall the company currently is a profitable business with low gearing, high (but declining) sales and productive workforce.
The Return on Equity improved from 37.5% in 2012 to 37.8% in 2013, positively confirming that many of the changes implemented by management during this period have been successful. During this same period revenues declined from $1.867bn to $1.845bn reflecting the competitive market environment and slowing household spending.
The greatest risk to the company’s long term survival is the challenge of online sales. Management must commit to providing a solution to this challenge, and while the Omni Channel capability is a marked move in the right direction, management must commit further money and resources to it to remain...

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