More brands for David Jones

Despite tough times, the retailer continues to reinvent itself

Scott Phillips (TMFGilla)

Scott Phillips is The Motley Fool’s Chief Investment Officer in Australia. He is Advisor of The Fool’s flagship investment service, Motley Fool Share Advisor and the Portfolio Manager of Motley Fool Everlasting Income and Premier Portfolio, as well as running our most premium service, Motley Fool Platinum. He is passionate about investing, having managed his own portfolio for over 15 years. A dyed-in-the-wool Fool (in the best way), he has been a member of The Motley Fool since 1999. Scott holds a Bachelor of Commerce (Management) and a Graduate Diploma of Accounting. Before joining The Fool, Scott worked in various Sales and Finance roles in industry, which has allowed him to see the good, bad and the ugly of corporate management close-up. Giving him a great understanding of the way businesses run – and what separates the business wheat from the chaff – Scott wholeheartedly agrees with Warren Buffett when he said he was a ‘better investor because I am a businessman and a better businessman because I am an investor’. Scott left a successful career to follow his passion – helping our members achieve the best possible investment returns, and helping Australians learn to better manage their money. It’s no surprise he ended up at The Motley Fool.

Published August 15, 2012 3:34 pm AEST

The storied department store, David Jones (ASX: DJS) might be going through some tough financial times with consumers reluctant to spend, and online taking a chunk of its sales, but the company isn't taking those challenges lying down.

DJs has today announced it is adding another 85 brands to its stores, bringing the total number of new brands introduced in 2012 to more than 220, according to the company.

Among the brands being added are Gary Bigeni, Vivienne Westwood and OrotonGroup (ASX: ORL) apparel.

The company is also in the news – thanks to the photogenic Miranda Kerr and the launch of its new collections. The endorsement doesn't come cheap, but there are few better ways of getting your brand into prime time news coverage!

David Jones is repositioning itself to be — in its own words — an 'omni-channel' retailer, allowing consumers to buy products in person, online or via a mobile phone or tablet. The company has foreshadowed a significant multi-year investment in this transformation, which will keep profits depressed for a number of years.

Not content to change the way in which it interacts with shoppers, the company is actively targeting more 'exclusive' brands — names that will only be available from David Jones, or for which David Jones is the exclusive department store retailer (read: you won't be able to find the products in Myer (ASX: MYR)).

This strategy has two benefits –it positions the retailer as a 'house of brands' to attract shoppers who otherwise might have shopped around. DJs hopes that becoming the first choice for consumers who want to access quality, in-demand brands gives it a branding advantage.

Additionally, exclusive distribution reduces price competition, blunting the impact of the current discount-driven apparel and homewares market. The company has already

Foolish takeaway

Whether David Jones can reinvent itself to combat an insurgent online offering (both from Australia and overseas), a resurgent Myer and the international brands like Zara and Topshop remains to be seen. Certainly recent sales figures from Harvey Norman (ASX: HVN) and JB Hi-Fi (ASX: JBH) suggest the tough times are still far from over.

Exclusive brands and a more seamless 'shop anywhere' approach are certainly positive moves. Time will tell whether it's enough.

If you're in the market for some high yielding ASX shares, look no further than our Secure Your Future with 3 Rock-Solid Dividend Stocks report. In this free report, we've put together our best ideas for investors who are looking for solid companies with high dividends and good growth potential. Click here now to find out the names of our three favourite income ideas. But hurry – the report is free for only a limited time.

More reading

Scott Phillips is an investment analyst with The Motley Fool. You can follow Scott on Twitter @TMFGilla. The Motley Fool's purpose is to help the world invest, better. Take Stock is The Motley Fool's free investing newsletter. Packed with stock ideas and investing advice, it is essential reading for anyone looking to build and grow their wealth in the years ahead. Click here now to request your free subscription, whilst it's still available. This article contains general investment advice only (under AFSL 400691)

Automatic Renewal

By taking up this offer, you will also be enrolled in our auto-renewal program, which is our way of making your ongoing subscription easier by ensuring uninterrupted service. Don't worry, though – you're not locked in, and can cancel your auto-renewal at any time before each 'anniversary' date without question or penalty.