Retail investors will be waiting for the upcoming post-Christmas sales figures to see if the forecast $15.1 billion was beaten. Strong Boxing Day sales may signal a better season than last.
David Jones Limited (ASX: DJS) is working to make the best of the holiday period and beyond, as it adjusts to new market conditions and an online sales expansion. There are three good reasons to make it an attractive retail stock for your portfolio.
1) Dividend
The dividend yield is 5.59%, paying out 89% of 2013's earnings per share. The company's policy is to always pay at least 85% of net earnings to its shareholders. Over the past five years, the total shareholder return was an average annual 12.7%, so that is a steady return for a mature industry.
2) Online sales and omni-channel
It has been developing and expanding its omni-channel sales to cater to customers who want the department store elegance and ease of online purchasing. Since the second quarter of 2013, online sales have been increasing every quarter by 100s of percent, according to the company's November AGM presentation.
Myer Holdings Ltd (ASX: MYR) has also invested into multi-channel sales to meet this growing retail trend. This is so it fully competes with both online retailers and bricks-and-mortar stores.
3) International brands and Chinese consumers
David Jones is adding many famous international brands to entice shoppers, both online and into the stores. In addition, it has become the first Australian department store to accept UnionPay (the national Chinese debit and credit card) for payment to take advantage of the growing number of Chinese shoppers and tourists domestically.
Foolish takeaway
Seeing that David Jones is taking on the necessary changes to keep growing is a positive for investors in the business. As we see the general economy improve, more consumers increase their shopping online and in the stores.
Other retailers like Premier Investments Limited (ASX: PMV) and Specialty Fashion Group Ltd. (ASX: SFH) should also be followed by investors, to see how their holiday and online sales performed for a more general view of the retail market.
