JOHANNESBURG – Woolworths (Woolies) chief executive Ian Moir said he would focus on getting things right at David Jones in Australia as the company yesterday cut dividends for the year to end June to contain debt.
Woolies said yesterday that it had asked Moir to spend significantly more time in Australia to oversee the David Jones turnaround in the role of acting chief executive of the brand.
“The South African business is solid and I believe I will be in a position to focus my time on rebuilding David Jones, and I can add more value in the brand.
“I have been working on driving inventories down and getting exciting new brands,” Moir said, adding that the Elizabeth Street store would be fixed by next March.
David Jones impaired A$437.4million (R4.52billion) during the period on a slowing economy.
The impairment reduced the brand’s valuation to by A$965m, while the onerous store leases, resulted in an additional provision of A$22.4m.
Moir said his strategy for David Jones would be to drive online sales.
“We will make sure that we address onerous leases and get better terms for our leases,” he said.
Woolies, which bought David Jones for in 2014, slashed its final dividend by 24.5percent to halve its debt to A$200m.
The final dividend declined to 98.5cents a share from 130.5 a share a year earlier. The total dividend was 190.5c a share, 20.3percent lower on the prior year’s total dividend of 239c per share.
“Our investors have told us that they think that it is the right thing to do,” said Moir.
Woolworths South Africa records solid results as sales increased 5.8percent during the period on the back of a stronger second half.
It said it recorded stronger performances in the second half from both the Fashion and Food businesses.
The food division had robust sales in the second half as the company continued to take market share from its rivals .
The local online business grew by 28.7percent, contributing 1percent to total sales.
Sales from the Fashion, Beauty and Home jumped by 1.5percent for the year with second-half sales up by 5.5percent, as a result of the focus on core ranges and basics, backed by improved availability.
Cratos Wealth portfolio manager Ron Kiplin said that the management of the South African operations had gained traction in the foods and apparel units, despite conditions.
“Food retailers seem to be the winners in comparison to the manufactures and (food) processors, squeezing the latter’s margins in an extremely competitive environment.
“Its early days yet in the apparel market, but Woolworths seems to have reconfigurated its strategy to once again cater for its traditional customer base, (after) having previously lost its way,” Kiplin said.
Woolworths stock rose 3.61percent on the JSE yesterday to close at R53.93.