“It is very much an international price issue, not a local price issue. It is not about retailers finally coming to the party; it is about transparency of price from a cost and retail perspective,” he says.
Laing says the competitive price pressure on David Jones is not helped by a GST threshold of $1,000 for online shopping from overseas, which he says puts more pressure on the Australian market and onto Australian jobs.
Brands which have reduced prices for David Jones include Estee Lauder, Lancôme, Clinique, Sisley, Clarins, L’Occitane, Yves Saint Laurent, La Mer, Gant, Nautica, Lacoste, Scotch & Soda, 7 for all Mankind, Nudie Jeans, Tommy Bahamas, Armani Collezioni, marc by marc jacobs, DKNY, Michael Kors, Guess, Steve Madden, Fossil, Scanpan, Riedel, Parker, Waterman, Canon, Bose and Olympus.
Laing says David Jones will not be refusing to stock suppliers who do not reduce their prices and negotiations continue with other suppliers.
“We will continue to work with our suppliers for as long as it takes. We are committed to the program and ultimately the natural forces of supply and demand will benefit those brands that have moved prices,” he says.
“Ultimately, the customers will drive the outcome.”
David Jones chief executive Paul Zahra said in a statement that the cost price harmonisation program is a top priority within the business.
“We are increasingly competing in the international arena and this has meant that it is important that we do everything possible to protect our customer value proposition and to ensure that the international brands our customers love are accessible at David Jones,” he said.
Brian Walker, chief executive of retail consultants The Retail Doctor Group, told SmartCompany it was unclear why David Jones had not worked to secure these savings earlier.
“I can only presume they are working harder and harder at the David Jones supply channel and squeezing a lot more out of their suppliers that inherently they were not before,” he says.
Walker says David Jones must be looking at volume uptake, which is far more sales at lower margins.
“There is absolutely no doubt David Jones is trying to become a much higher volume retailer focusing on quantity of sales and margins as distinct from quality,” he says.
“Why haven’t they done it previously? Because, ultimately, the market hasn’t asked them to and now the market has by shopping elsewhere.”
