Retail, Innovation and Manufacturing reporter for the NZ Herald

Something new in store for NZ shoppers

David Jones has high hopes for Wellington, reports Holly Ryan.
David Thomas chief operating officer of David Jones. Photo / Supplied
David Thomas chief operating officer of David Jones. Photo / Supplied

Compared with the David Jones store downstairs - all white, marble and lavish decoration - David Thomas' office is decidedly ordinary.

A dartboard adorns the back of the door, papers cover the desk and the only artwork is a photo of David Jones model Jessica Gomes, but Thomas - the company's chief operating officer - seems unconcerned.

The 39-year-old has spent the past 12 years in fashion retail, starting with Australian brand Country Road before taking over as chief operating officer of David Jones in 2014.

Thomas is the brains behind the operations of the Australian department store giant, now making its first move into New Zealand with a store in Wellington.

He is optimistic about the retail environment - but pragmatic.

"I'm really excited about the Wellington store, I think it's going to be quite special," says Thomas.

"Do we feel a lot of pressure? Yeah, sure, but we feel that with every one of our stores. Yes, there's a lot riding on Wellington but there's a lot riding on any of the other stores we own."

David Jones has gone through three chief executives in the past two years but Thomas has survived the changes, and helped turn the company's fortunes around.

In 2014 the venerable brand - now 178 years old - was struggling when it was bought by South African firm Woolworths Holdings for A$2.1 billion.

Woolworths also paid retail mogul Solomon Lew more than A$200 million for his minority stake in Country Road, and since the takeover, both brands have enjoyed a turnaround in earnings.

Under its first year of South African ownership, David Jones posted a 28.8 per cent jump in operating profit to A$161m for the 11 months to June 30.

That success came with a few casualties, however. Shortly after taking over, Woolworths removed 180 brands from stores and added some of its own labels including Mimco and Witchery, as well as showing the door to several of the company's executives including recently appointed chief executive Iain Nairn.

Thomas admits it wasn't an easy time, but it showed the company had what it took to get results.

"I've had the opportunity to be with our group for a long time and I think that Woolworths is one of the world's great retail brands," Thomas says.

"They really make sure that they provide first and foremost to the customer with great product in beautiful stores with great service.

"Under Woolworths' ownership, I think the focus has been about doing things with David Jones and doing them properly."

David Jones' first New Zealand store is set to open on July 28 - much to the anticipation of Kiwi fans - in the old home of department store Kirkcaldie and Stains.

Like David Jones, Kirks faced numerous challenges and despite being a Wellington icon, analysts say it was unable to evolve to meet the rapidly changing demands of the New Zealand market.

"Kirks' goodwill was possibly gone even before it closed amongst the majority of consumers," says Chris Wilkinson of consultancy First Retail Group. "It had strayed in the last few years, and people are quite travelled these days, they have an expectation and Kirks wasn't delivering on that expectation."

The opportunity to launch in a store with so much history and in a prime location was a significant reason for choosing Wellington as its first launch site according to Thomas, who says David Jones tried to retain as much of the building's heritage as possible.

Wilkinson believes tourism was also likely to have been a factor in attracting David Jones, with cruise ships bringing in about $50m in retail spending to the city CBD.

The company bought Kirkcaldie & Stains for more than $500,000 and has gone over its $20m budget to refurbish the premises of the 152-year-old business.

Having helped revitalise the David Jones brand, Thomas is keen to see how he can paint the retail landscape in New Zealand, although he is keeping his cards close to his chest.

"We have a lot of expertise in the New Zealand market through Country Road, Trenery, Witchery and Mimco, and the beauty of Wellington is that the shopping precinct is actually very focused on the CBD," he says.

"We're not chasing down New Zealand opportunities; we'll see how this goes first."

New Zealand's retail scene - with different department stores in the major cities - may change if David Jones decides to expand its footprint, something which has been hotly predicted by analysts, and which would give the company a strong foothold in the New Zealand market, particularly in the online area which stores such as Smith and Caughey's have been slow to adapt to.

"Smith and Caughey's does hold a lot of goodwill, but it's no longer the contemporary shopping destination that it was," Wilkinson says.

"This is the expectation that consumers have now. You only have to hop on a plane and jump off in Melbourne and look at the new David Jones there, it's a world-class facility and people expect that now.

"Differentiation is everything," says Wilkinson. "You have to have something unique both in product and experience and David Jones have done that."

Speculation has been rife on where David Jones will expand to after Wellington, with some analysts saying the company will have to look to Auckland next.

"I would say [a second store] is already under planning now - I could almost certainly guarantee that they would be in close negotiations on a second site," Wilkinson says.

"Without a doubt their focus would be on Auckland because it's such a cosmopolitan market and there is a huge spending capacity there."

Asked about the prospects for Auckland, Thomas will only say that nothing is cast in stone and David Jones will see how its Wellington move goes before deciding on its next step.

As the first store outside Australia, he says, the Wellington opening marks a significant moment in the department store's history.

Wellington's new David Jones will employ more than 150 staff, with former Kirks workers offered the jobs first.

David Thomas

Role: Chief operating officer, David Jones

Age: 39

Family: Married with 3 children (8 months, 2 years and 4 years)

Previous roles: Country Road, since then David Jones

Lives: Melbourne

• Holly Ryan travelled to Australia courtesy of David Jones

- NZ Herald

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