David Jones pays off for Woolworths
Listed fashion and food retailer Woolworths says its sales for the 52 weeks to 28 June gained 54.9% thanks to sales from its Australian unit, David Jones.
Retailers measure their financial periods by weeks instead of a full year to strip out the anomaly of including an odd day at the end of the period.
Woolworths says in a note to shareholders that, excluding the benefit from David Jones, group sales gained 12%.
The fashion and food retailer bought the Australian chain about a year ago for $2 billion (R21 billion). At the time, it said the deal would make it the leading southern hemisphere department store operator. as well as one of the largest firms on the JSE.
The bid would also give it enough scale to drive significant efficiencies and economies through enhanced global sourcing and the ability to leverage common seasonality and fashion trends.
Woolworths had previously said the combination of both the companies would comprise 1 151 stores across 16 countries and a tangible asset base of about R21.4billion.
Woolworths adds its food sales gained 13.5%, with a price movement of 7.7%. Like-for-like sales, which strips out any additional shops added during the year, gained 6.6%.
Statistics SA’s figures show, on average, food prices increased by 0.9% between March 2015 and April 2015.
During the year, Woolworths expanded its retail space 10% after excluding closures and franchise conversions. This includes outlets added in Africa.
Woolworths Clothing sales in South Africa increased 9.6% and by 4.0% on a like-for-like basis.
Retail space, including stores added in the rest of Africa, gained 7.1% after eliminating shops that were closed and franchise conversions.
The company employs more than 38 000 employees across 15 countries and trades in about 1 200 stores.
General Merchandise sales increased by 7.7% and by 5.6% in comparable stores.
David Jones sales, which are included from the effective date of 1 August 2014, gained 6.4% in Australian dollar terms as it experienced a strong second-half, says Woolworths. Sales in comparable stores grew 3.7% and net space grew 1.3%.
Country Road Group sales in Australia and New Zealand increased by 11.5% in Australian dollar terms. Sales in comparable stores grew 4.7% and net space grew 23.1%, 17.0% of which was space reallocated from other brands in David Jones.
Country Road Group’s South African sales are included in the Woolworths Clothing figures.
The Woolworths Financial Services debtors’ book showed year-on-year growth of 10.5% and its impairment rate has increased slightly from 2014, moving from 4.8% to 5.4%.
Woolworths expects to publish its results on 27 August.