David Jones Ltd, Australia's No.2 department store chain, posted a 3.1 percent decline in third-quarter sales with no improvement seen in consumer sentiment, and said it plans to keep its valuable property assets and has no takeover talks to report.
The non-mining sectors of Australia's economy are struggling under a strong currency, relatively high interest rates, falling home and share values and indebted consumers, and some observers have speculated that David Jones may become the target of a private equity buyer after its share price halved since May last year and with property assets worth around $800 million.
The retailer said same-store sales in the quarter ended April 28 fell 3.1 percent and reaffirmed its full-year earnings could fall up to 40 percent as it invests in a costly overhaul of its strategy, adding service staff and beefing up its online offering.
David Jones Chief Executive Paul Zahra told journalists on Thursday that there was "nothing to report" when he was asked if there had been any buying interest from private equity.
"Just lots of talk and rumours, but it's simply that. Nothing to report," he said, adding that David Jones had no plans to sell property holdings.
David Jones owns buildings in the hearts of both Sydney and Melbourne, which house its department stores.
Larger rival Myer Holdings was acquired for A$1.4 billion in 2006 by TPG Capital Management LP, which later sold property assets before selling shares in the company.
Zahra said consumer sentiment remained weak with no improvement in sight.
"It's become the new normal," he said, adding that sales were "consistently negative" at about 3 percent less than a year earlier.
"The first few weeks of the (fourth) quarter have traded broadly in line with third quarter," he said.
Australia's biggest department store chain, Myer, reported a 2.1 percent fall in third-quarter same-store sales and last week cut its 2012 net profit guidance after a sharp decline in April and May sales.
David Jones said total third-quarter sales, including new stores, fell 2.9 percent from a year earlier to A$399.8 million ($388.95 million).
Shares in David Jones were down 0.9 percent at A$2.23 at 0400 GMT, after hitting a 2012 low of A$2.16 last week, down from more than A$4 a year earlier.
This article is copyrighted by Reuters
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