Woolies’s David Jones dream is not lost, says Ian Moir
CEO admits mistakes and heads off to rescue David Jones
● Ian Moir, the CEO of Woolworths who embarked on the David Jones deal more than four years ago, will head down under for the next couple of months in the hope of resuscitating the troubled brand.
Moir is placing his bets on the refurbishment of its luxurious David Jones flagship store in Elizabeth Street, Sydney. The company has invested A$200m (R1.995bn) while other stakeholders have spent another A$200m in the transformation of the fivestorey department store.
“As a chief executive, you focus on the areas where you have the greatest issues,” Moir told Business Times this week. “With David Jones I’m going to have to spend more time in Australia and that just happens naturally. Over the next couple of months my focus will be David Jones.”
While Moir is in Australia, Woolworths SA CEO Zyda Rylands will lead the operations to fix some of the troubles in SA where the country faces low economic growth and constrained consumer spending.
“The clothing business here [in SA] has turned around and is looking better and Zyda’s in control, she’s got good people in place. You put the effort in where it’s needed,” said Moir.
The group on Thursday released a sluggish set of numbers in their interim financial results for the 26 weeks ended December 23. The group reported a 1.9% increase in turnover and concession sales.
Sales for Woolworths’ non-food division, including fashion, beauty and home, declined 2%. David Jones grew sales only 1%. Sales for the Australian department store were also offset by the revamp of the Elizabeth Street store, which the company said caused some disruptions.
Despite the disruptions and struggles with David Jones, Moir said his ambitious plan to create a retail giant in Australia to compete with international brands such as H&M and Zara wasn’t a dying dream.
“We’ll create the most unique shopping experience in the southern hemisphere; and so the dream is not lost, it’s becoming more and more of a reality. Has the execution been nightmarish at times? Absolutely, but the dream is not lost,’’ he said.
Adding to the retailer’s woes was the flurry of resignations by key directors in the last few weeks.
David Thomas resigned as CEO of David Jones and Gail Kelly and Patrick Allaway, who were the only Australian board members, left a few days later.
The company declined to comment on what triggered Kelly’s and Allaway’s resignations.
Woolworths has embarked on a search to find their replacements.
“It’s a global search. We want really heavyweight international retail experience on the board. That’s the brief for some time. Hopefully we’ll be able to make some announcements in the near future.”
Moir warded off suggestions that David Jones assets may be further impaired, saying that there is currently no need for any impairments. The R7bn impairment of the Australian department store chain led to a loss of
The dream is not lost, it’s becoming more of a reality Ian Moir
Woolworths CEO
R3.5bn in the 2018 financial year.
Moir said the group had underestimated the structural challenges in the Australian market at the time of the David Jones acquisition.
“I think I’ll take responsibility and say that we didn’t see the issues in the system transformation that we experienced. It was more difficult, more costly, more time-consuming than we expected it to be,” he said.
Part of the strategic turnaround plan for the David Jones business includes the aggressive reduction in space. The group plans to cut retail space 20.7% by 2026.
“We’ve had debates with the landlords. They know, we know and obviously there are staff that will be impacted in the stores,’’ said Moir.
“What keeps me up is making sure that the guys are focused on trading and fixing that business and getting it right for the customer.”