Me and Mr Jones

David Jones’s CEO, Paul Zahra, is pur­su­ing a mantra of reinvention that re­sponds to con­sumer de­sires while main­tain­ing the 175-year-old depart­ment store’s core mis­sion to sell the best at the best prices

The Australian - Wish Magazine - - Arts - Story Luke Slat­tery I Por­trait Pho­tog­ra­phy Nick Cub­bin

David Jones’s Syd­ney head­quar­ters opened its doors when the world was be­tween wars, and the build­ing com­bines an aus­ter­ity well-suited to the times with an op­u­lence that was not. The con­trast is clear­est on level 7. At one end is the pala­tial ball­room with round-arched win­dows more than 6m in height; the other, where Paul Zahra has his of­fice, has been halved by a mez­za­nine. The chief ex­ec­u­tive en­joys a view over the canopy of Hyde Park to­wards a wedge of har­bour through only the top of one of th­ese glo­ri­ous win­dows. But he does not, he tells me when we meet at level 7M— or seven-and-a-half — en­joy the view of­ten enough. He is man­ag­ing a com­pany in tran­si­tion as it marks its 175th year, and his sights are set else­where.

A man of medium height with a strong build, the Melbourne-born Zahra, who took the helm at David Jones in June 2010 — when he was group gen­eral man­ager of op­er­a­tions — has in­her­ited a seem­ingly age­less Mediter­ranean com­plex­ion from his Mal­tese par­ents. He meets me in his of­fice with a no-non­sense air, wear­ing dark grey trousers and a white busi­ness shirt with French cuffs. His gaze is di­rect and his mes­sage clear: “The fu­ture is bright, but we have to change. We’re do­ing all the right things.”

Founded in 1838 by the Welsh im­mi­grant mer­chant who gave the store his name, David Jones is among the world’s old­est depart­ment stores in con­tin­u­ous op­er­a­tion un­der the same name. Jones’s mis­sion was to sell, as he put it, “the best and most ex­clu­sive goods” and to carry “stock that em­braces the ev­ery­day wants of mankind at large”. The en­ter­prise quickly out­grew its first Ge­orge Street premises, which were de­mol­ished in the late 1880s to make way for a much larger struc­ture with a hy­draulic lift — the clos­ing down sale cre­ated quite a buzz in colo­nial Syd­ney.

In 1927 the build­ing that houses Paul Zahra’s of­fice opened at the cor­ner of El­iz­a­beth and Mar­ket streets. It has re­mained the flag­ship store ever since. With the com­pany’s 175th an­niver­sary pend­ing when we meet, Zahra is acutely con­scious of the span of the store’s his­tory. “We’re an old brand with an amaz­ing her­itage,” he ex­plains. “We’re ac­tu­ally older than Sel­fridriges and Har­rods in Lon­don. We were built be­fore the Syd­ney Har­bour Bridge and the Opera House. Ours is a story of fam­ily, of com­merce, of a brand that has en­dured two world wars. It’s quite a story, a story of tra­di­tion, and of change.”

To em­pha­sise its evo­lu­tion he notes that the store be­gan with hab­er­dash­ery items and school uni­forms and grew into a true emporium of many de­part­ments that caters to “ev­ery­body’s need and fit in one lo­ca­tion. It means that madam goes to the fit­ting room once”. Some de­part­ments, such as fash­ion, man­age to thrive; oth­ers don’t. An ex­am­ple is the mu­sic, games and DVD cat­e­gory, jet­ti­soned af­ter a sales slump of 1.4 per cent dur­ing the Christ­mas sea­son de­spite to­tal rev­enue of $590 mil­lion. There is spec­u­la­tion elec­tron­ics is next on the chop­ping board.

Among the changes that Zahra be­lieves are “in­te­gral to the com­pany’s suc­cess” is price re­duc­tion on im­ported brands in the teeth of stiff on­line com­pe­ti­tion. This is a del­i­cate process as it means pres­sur­ing brands to re­move the fat in the in­ter­na­tional sup­ply chain.

“We’re ask­ing our sup­pli­ers to re­move the in­ef­fi­cien­cies out of their dis­tri­bu­tion model so that they can get their prices in line with their in­ter­na­tional peers,” Zahra says with a firm tone. He is not talk­ing his­tory now; he is talk­ing sur­vival. “If brands choose not to re­duce their prices, cus­tomers will vote with their feet in the first in­stance. And if prod­uct in our stores is not up to stan­dard, those brands will be re­moved.”

A par­al­lel strat­egy in­volves forg­ing al­liances with big in­ter­na­tional brands that al­low them to sell in Aus­tralia in DJ’s re­tail space. The first of th­ese al­liances, an­nounced last month, is with the Span­ish fash­ion brand Mango, and it is un­der­stood that David Jones is in dis­cus­sions with the pres­tige US chain, Brooks Broth­ers. Zahra is wary of of­fer­ing de­tails, but the dis­cus­sions are clearly part of a global strat­egy to si­mul­ta­ne­ously trim prices and strengthen the phys­i­cal store’s ap­peal to con­sumers who have a re­la­tion­ship with th­ese brands through their trav­els and on­line pur­chases.

More broadly, he be­lieves that the en­try of new in­ter­na­tional play­ers is “reignit­ing” in­ner-city shop­ping precincts and ben­e­fit­ing his own store by de­fault. The change mantra is not, how­ever, un­com­pli­cated or oned­i­men­sional. The firm is at­tempt­ing to man­age change with an eye to its bet­ter tra­di­tions, to look back­wards as

it rows for­ward. “Since the global fi­nan­cial cri­sis it would be fair to say that re­tail has had a very tough time,” Zahra ex­plains. “That’s been par­tic­u­larly true at David Jones be­cause we op­er­ate in that pre­mium dis­cre­tionary end of the mar­ket, so we’ve felt that pain quite a bit. I was ap­pointed at a time of cri­sis and it was a great chal­lenge.”

The cri­sis to which he refers is not only eco­nomic. Zahra, who has en­joyed more than 30 years of ex­pe­ri­ence in the re­tail sec­tor, al­most half of it at David Jones, was ap­pointed af­ter the res­ig­na­tion of his pre­de­ces­sor, Mark McInnes, amid sex­ual ha­rass­ment com­plaints by for­mer em­ployee Kristy Fraser-Kirk. It was a nasty mo­ment for the pres­tige black-and-white hound­stooth ‘‘brand’’. Ac­tion taken by Fraser-Kirk put the com­pany in the head­lines for all the wrong rea­sons and forced it to set­tle with the plain­tiff for a re­ported sum of $850,000. Adopt­ing the at­ti­tude that one man’s cri­sis rep­re­sents an­other’s op­por­tu­nity, he im­me­di­ately be­gan work on a strate­gic plan to re­po­si­tion the firm in time for its 175th birth­day this month.

“I was tak­ing on the re­spon­si­bil­ity of man­ag­ing a pub­licly listed com­pany and I started to re­flect on the

“The firm is at­tempt­ing to man­age change with an eye to its bet­ter tra­di­tions, to look back as it grows”

sig­nif­i­cance of a her­itage brand,” he tells me. “As I went through the com­pany’s ar­chives I be­gan to see how it has rein­vented it­self and trans­formed it­self.” And so he hit upon a dual-track strat­egy to main­tain the store’s brick­sand-mor­tar pres­ence, strengthen its flag­ship Syd­ney and Melbourne stores, which it owns, and si­mul­ta­ne­ously em­brace the dig­i­tal age. This gave birth to an om­nichan­nel rev­o­lu­tion that, he says, “com­pleted 10 years of work in 10 months” and al­lows cus­tomers to in­ter­act with the store at its phys­i­cal lo­ca­tions, at home, or on the move. A web store, launched late last year, saw a dou­bling in its first three months of on­line turnovers. “You see our thoughts about the store of the fu­ture clearly at High­point in Melbourne,” Zahra says. “This is what we’re call­ing a next-gen­er­a­tion store and it has all the tech­nol­ogy in place, such as free cus­tomer WiFi and traf­fic an­a­lyt­ics.”

Clock­wise from above: the first David Jones store on the corner of Ge­orge and Bar­rack streets in 1838; Sir Charles Lloyd Jones, chair­man 1920-58; the cos­met­ics depart­ment in the 80s; the ground floor in 1927

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