David Jones expects sales slump next yr

David Jones chief executive Mark McInnes says he expects the worst slump in sales to be in the first half of next year after the retailer forecast a 7.5 per cent fall in like-for-like sales in the next three quarters of fiscal 2009.

On Wednesday, David Jones reported a 6.3 per cent fall in first quarter sales but affirmed its forecast for fiscal 2009 of five to ten per cent profit growth.

"The real pain is going to kick in next half, and we're preparing ourselves for it," Mr McInnes told a teleconference.

"At the moment our minus 7.5 per cent growth this half is off the base of about eight per cent plus the previous year.

"But our minus 7.5 next half is off about plus one (the previous year)."

He said if sales were worse than the minus 7.5 per cent, then David Jones would review its guidance.

The forecast minus 7.5 per cent like-for-like sales over the final three quarters of fiscal 2009 would be "worse than was experienced in the 1990/91 recession", the retailer said.

"Year on year, the stock market is down 50 per cent, and consumer confidence is completely shocked, so that's obviously having an effect on the more discretionary ends of our business, things like beds and fridges and TVs.

"But our core womenswear and cosmetics business is still pretty good," he said.

Mr McInnes said sales had been volatile since the end of the first quarter.

While August and September had good sales, he said the company suffered in mid-October amid huge falls in share markets worldwide and government intervention in the financial system.

"We have seen a material drop off since that time and we've seen no recovery from that," Mr McInnes said.

The forecast follows yesterday's announcement by the upmarket retailer that it will open a new store at Whitfords next year and refurbish its existing Karrinyup outlet.