Friday April 16, 2004
Pumping Up Beauty Down Under
By Patty Huntington
SYDNEY — According to its 50-year-old advertising slogan, “There’s no other store like David Jones” in Australia. Now, the upscale Down Under department store chain is promising to build a multimillion-dollar cosmetics and accessories hall intended to nearly double the store’s reach in both businesses.
David Jones chief executive officer Mark McInnes unveiled plans for a $26.6 million, or 35 million Australian dollar, refurbishment of the ground-floor cosmetics and accessories department of the retailer’s flagship Australian store at Elizabeth Street here late last week. Flanked by placards that read “Bringing the World’s Best Cosmetics and Accessories Hall to Sydney,” McInnes outlined the specifics of the hall’s first major upgrade in 22 years — to be modeled, he said, “on Selfridges, Saks Fifth Avenue and Bon Marche” — and said he expects to see 40 and 45 percent increases in total floor space dedicated to cosmetics and accessories, respectively. All dollar figures are converted from the Australian dollar at the current rate of exchange.
The refurbishment announcement is the latest salvo to be fired in Australia’s current department store wars, which witnessed Australia’s only other major department store chain, the 63-unit Myer Grace Bros., rename itself in February under the streamlined name of Myer. New Myer managing director Dawn Robertson has also been aggressively marketing Myer as a fashion destination — to rival David Jones’ established strategy of designer exclusives, which include the cream of Australia’s designer labels, such as Collette Dinnigan, Easton Pearson, Akira Isogawa, sass & bide, Scanlan & Theodore and Lisa Ho.
Under new ceo McInnes, David Jones has entered into a three-year restructuring period, which saw a $329.26 million, or 433.4 million Australian dollar, interim net profit — a 58 percent increase — for the six months ended Jan. 24, with share prices at a five-year high. The cosmetics hall refurbishment is part of the company’s plan to deliver 1.5 to 2.5 percent total sales revenue growth in fiscal 2004, as outlined in the company’s June 2003 Strategic Review.
The cosmetics and accessories refurbishment program, due to start May 24 and to be completed in time for Christmas, will involve the gutting of the Eighties-style mirrored columns and wall panels, glass cabinets and veined Verona marble flooring to create two east/west flanks on either side of the central escalators — cosmetics on one side, accessories on the other — with hosiery moved to the basement. Although prominent heritage features of the Twenties building — such as the Art Deco “lady lamps,” lift fascias and stairways — will be preserved, the new decor will be modern, minimalist and very, very white: white walls, ceilings, stone-covered columns and white Verona marble floor tiles. As well, the new design will offer significantly wider aisles.
According to McInnes, cosmetics account for 14 percent of David Jones’ sales turnover across its 34 stores. The retailer reported $703.71 million, or 926.3 million Australian dollars, in sales in the six months ended Jan. 24, up 2.8 percent over the previous year.
McInnes promised that the renovation will deliver “the most exhaustive and comprehensive range of national and international beauty brands in one location” in Australia. The store’s brands — many of which are currently divided by brand name — will be organized into three ground-floor destination areas: skin care, color and an “unparalleled World of Fragrance.” However, the 120-square-yard, ground-floor concession for Jo Horgan’s beauty emporium chain Mecca Cosmetica — which contributes 26 hip brands like Nars, Stila, Darphin and Bumble and bumble — will remain untouched in the northwest ground-floor corner.
Some current ground-floor prestige brands — like Guerlain and Shiseido — are heading to the basement, which is also being renovated and beefed up to make room for a greater body and bath offering, including in-store concept areas for Molton Brown, Origins and David Jones’ rapidly expanding eponymous beauty brand. A new day spa will boast eight treatment rooms across two floors, a nail spa and branded spa concepts for La Prairie, Jurlique and Ella Baché.
“The best thing for us is to be able to showcase our brands in true flagship style, in a new, innovative environment,” Penny Thompson, ceo of Estée Lauder Cos. Australia, told WWD after the briefing, noting that the store design would mark the first time in Australian retail history that Lauder’s current brand portfolio in Australia would be under one department store roof.
For the first time, she added, MAC Cosmetics and Origins — both of which previously had exclusive arrangements with archrival Myer — will enter David Jones. “We’re strong partners with the Myer group with MAC, but we are [also] moving into David Jones with the brand because it’s time for us to take the next step,” said Thompson. “Our MAC customer at Myer is younger, and we believe that we will tap into a new customer base at David Jones.”
Thompson also promised some “world-first retail initiatives” for Lauder’s new David Jones counters. While she kept mum on specifics, Thompson said Lauder’s New York headquarters is working closely with the David Jones team to offer a cohesive presentation.
On the accessories side, David Jones will add in-store concept boutiques for Prada, Fendi, Christian Dior — all new to the retailer — and a fourth new, yet-to-be-announced luxury brand. This will add to the current ground-floor accessories lineup that includes Bulgari, Burberry, Bally, Salvatore Ferragamo, Sonia Rykiel, Longines, Tag Heuer, Kate Spade, Giorgio Armani and Oroton.
Not everyone, however, has warmed to the refurbishment news. A furor sparked by a Sydney Morning Herald newspaper report last week about David Jones’ plans to ax its ground-floor pianists prompted McInnes to finally reconsider that decision on Wednesday. He said he would bow to customer pressure and try to integrate the pianists and their old-fashioned baby grand into his slick, futuristic cosmetics vision.
“How courageous can you be in an area that is your main profit-driver, how far can you change the formula?” wryly observed one Australian beauty retail source — who declined to be named — of the David Jones plans. “If you take the safe path or the judicious path, almost by definition, you can’t be a true global groundbreaker. But I think you can still do something very interesting, and I think that within the Australian market you can still do something highly innovative. I believe [David Jones] can deliver that.”
According to the most recent data from local beauty data analysts bU Australasia, department store sales accounted for 32.8 percent of the $1.37 billion, or $1.8 billion Australian dollar, Australian beauty retail market in 2003. That was up from 32.6 percent in 2002 — the biggest growth spike in retail distribution channel sales after pharmacies [which grew from 14.9 percent to 15.2 percent over the same period]. The overall Australian beauty market grew 7.3 percent, driven by an 11.4 percent jump in skin care. BU is predicting overall market growth of 5 percent to 6 percent in 2004, with the strongest growth again expected in the skin care segment.
), they even have two counters in David Jones Elizabeth street, what is the point of having two similar counters in the one store! Plus, MAC and Origins are both owned by EL! 
