Change or ‘die’ the choice for retailers
WOOLWORTHS Holdings chief Ian Moir says there is no hiding from a “tsunami” of change pummelling the retail sector and businesses that do not confront it head on will “wither and die”.
The head of the South African retail conglomerate that owns David Jones also says it will continue to spend “what we need to” in order to build a department store chain that will thrive over the long term.
“We are in a very changing world,” Mr Moir said.
“The customer is changing, we have a tsunami of technology, there is increased competition and competition is globalising. The business models need to change.
“We are right in the middle of it and if you don’t change, if you don’t recognise it, don’t accept it, don’t change your business, adapt to the new changing world, you’re not going to succeed and as a retailer going forward you may not even be here. You either change or you wither and die and we are not going to wither and die.”
Mr Moir was speaking after David Jones revealed it had suffered a 25 per cent slide in profit to $127 million for the year to June.
It was the slimmest haul since Woolworths bought the nation’s oldest department store for $2.4 billion in 2014.
Mr Moir said DJs had continued to win share in a market undergoing huge change.
David Jones will spend $300 million in the next few years moving its head office to Melbourne, expanding its flagship Sydney store and pushing deeper into the gourmet food sector.
It will relaunch its loyalty card program this year, combining the David Jones customer database with that of sister fashion chain Country Road, and update its website.
“We will do the right things for the short term but more importantly we will do the right things for the long term and spend the money that we need to,” Mr Moir said.
“We have seeing this coming for a long time and are investing heavily and we continue to invest … there aren’t many businesses in Australia that are doing that right now.
“Yes, it is going to impact our results in the short to medium term. But we want to create a great business for the long term.”