Sales slump for top Australian retailer

Top-end Australian department store David Jones reported a 4.7 percent slump in full-year sales Thursday and warned of "extremely difficult" conditions as consumer gloom squeezes retailers. The retail giant reported sales of Aus$1.96 billion (US$1.99 billion) for the 12 months to July 30, almost five percent lower than the previous year, with a company-wide slump led by home entertainment and electrical goods. Sales dropped 15.9 percent in the final quarter to Aus$462.1 million as consumer confidence collapsed and the Australian dollar surged to new highs against the greenback, boosting online shopping and overseas travel. "Trading conditions continue to be very challenging in the early days of 1Q12," said chief executive Paul Zahra, referring to the three months to the end of September 2011. "In the face of this environment we are continuing to manage our costs tightly and we are actively working and making progress in managing our inventory position." The company restated earlier forecasts of a 0.5-2.0 percent decline in full-year profit, but warned that conditions were looking increasingly dire. "It is still early days, however, with the turmoil in the marketplace and the continuing decline in consumer confidence, to date 1Q12 has shown no improvement from trading in 4Q11," it said. David Jones shares fell 6.79 percent on the sales report to Aus$2.61 on a broadly lower market. Consumer sentiment is at its grimmest since the global financial crisis and had plunged sharply even before the latest market rout, linked to Standard and Poor's unprecedented downgrade of the United States and debt woes in Europe. Retail sales fell 0.1 percent across Australia in June, according to the latest available figures, deepening the 0.6 percent slide seen in May.