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David Jones Limited Essay Sample

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David Jones Limited Essay Sample

Abstract

David Jones Limited, Australia is one the oldest departmental stores in Australia still trades with its original name. A brief account of the history of the company, services provided and the summary of the annual financial report for the present year are the main part of this paper. The company had great achievements for the past few financial years. It had made excellent profits for the past five years. The point to be noted regarding the improvement of the company is consistency, which was maintained throughout the success track. This consistency can be observed from the tabular columns and graphs presented. If this track record continues for the fore coming years as well then the profits of the company will be unimaginable.

David Jones Limited

            David Jones is not only Australia’s oldest department store, but the oldest department store in the world still trading under its original name. Just 50 years after the founding of the colony, Mr. David Jones, a Welsh-born immigrant, opened “large and commodious premises” on the corner of George and Barrack Streets on 24 May 1838. David Jones eventually retired and left the management of the store to his business partners. Unfortunately, the store failed and the assets of David Jones were assigned to Trustees. He came back out of retirement, borrowed heavily, and with the help of new partners and his son Edward Lloyd, managed to recreate the store’s success. David Jones became a public company in the year 1906.

In 1920, David Jones was added to the stock exchange. David Jones brought Sydney out of the post-war doldrums with Paris-style fashion parades in 1947. Pierre Balmain had the women of Sydney enthralled, and one year later came the collection of Christian Dior’s famous ‘New Look’, the first time Dior had ever shown outside Paris. In the 1990’s, While the business of retailing changed in many ways, David Jones maintained its commitment to world class service. The millennium began with David Jones reentering the Western Australian market, introducing the David Jones Shareholder Rewards Program and launching the David Jones website. The reconstructed David Jones store at Rundle Mall in Adelaide won a prestigious international award as the best newly completed store in the world in the year 2000.

Activities

The various services offered by the David Jones Limited include Gifts and Bridal Registry, Hampers, Gift card, Interior Decorating, Food Hall, Flowers and its Rose Clinic. David Jones Corporate Services can supply David Jones Gift Cards for the Christmas gift, corporate incentive, reward, loyalty, and promotional needs. When planning for a special occasion like wedding, David Jones Gift and Bridal Registry can help planning such events. There are a wide range of hampers offered by the David Jones at their stores. For that special occasion, the David Jones Premium Gift Card is a gift like no other. Presented beautifully in a stylish black box accompanying a gold and black greeting card, it’s the ultimate gift for an occasion that needs that perfect touch.

Enlist the services of David Jones’ trained interior decorators to solve the furnishing requirements. They help the customers with their latest ideas and solutions in furniture, window treatments, lighting and accessories.  Whether it be love, thanks or even an apology, their floral designers will help the customer choose the best flowers to convey their message. They deliver that certain style to weddings, brighten those dinner parties and add flair to corporate functions. They also provide beautiful bouquets and arrangements.

Summary of Financial Position

The 2007 financial year is the fourth since implementation of the 2003 Strategic Plan and they are delighted to report that throughout this four-year period, the Company has:

  • Outperformed both the ASX200 (Australian Stock Exchange) Index and the ASX200 Consumer Discretionary Index in terms of share price performance (refer to Graph 1);
  • Delivered an increase in Department Store Sales of more than $300 million since FY03,to $1983.2 million in FY07 (refer to Graph 2);
  • Delivered a year-on-year increase in Profit after Tax (from $42.7 million in FY03 (pre-significant items) (previous AGAAP) to $109.5 million* in FY07 (AIFRS))(refer to Graph 3);
  • Delivered a 267% increase in fully franked dividends to ordinary shareholders from 6 cents per share (cps) in FY03 to 22 cps in FY07 (refer to Graph 4);
  • Delivered an increase in EPS of 167% (from 9.2 cents in FY03 (previous AGAAP) to 24.6* cents in FY07 (AIFRS)) (refer to Graph 5);
  • Delivered an increase of nearly 100 basis points in Gross Profit Margin over the past 2 years to 39.3% in FY07;
  • Decreased its Cost of Doing Business (CODB) by 140 basis points from 33.7% in FY03 to 32.2% in FY07; and
  • Maintained a tight control on Capital Expenditure (Capex) by keeping it below our $50 million p.a. target (excluding the Capex required in FY07 for the new Burwood and Chermside stores, which were funded by the reinstatement of the Company’s Dividend Reinvestment Plan).

FY- Full Year

ASX- Australian Stock Exchange

The highlights of the company’s report are as follows:

  1. There was an increase of 8.9% in the sales revenue.
  2. 35% increase in the underlying profit after tax.
  3. The dividend growth was 37.5%.

            The above table explains that the company is doing very well in all aspects. The net assets from 2006-07 have increased more than twice which is a remarkable achievement. The financial position of David Jones Limited, Australia has improved a lot compared to the previous five years as shown in the table above. There is consistency in the growth of assets and profits.

Strength

–          Strong brand awareness in domestic market

–          Sells the best and most exclusive goods.

–          Carries a stock that embraces everyday wants of mankind at large

Weakness

–          Not globally renowned

–          The business is confined to Australia, but it is not global.

 

Opportunities

–          To expand the services world wide and gain the same fame in international market.

 

Threats

–          New upcoming stores who opt many offers.

–          Other cheaper suppliers.

References

David Jones Limited, Australia (2007, September). Annual Report 2007, Retrieved November

            7, 2007, from http://www.davidjones.com.au/corp/company_reports.jsp

   David Jones Limited, Australia (2007, November), from

http://www.davidjones.com.au/about/story_of_djs.jsp?SID=HomeDJStory

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