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David Jones has posted a huge surge in sales under its new management

Getty/ Graham Denholm (File)

Here’s a bright spot in the gloom of the Australian retail sector.

Department store David Jones, under new management since its $2.1 billion takeover by South Africa’s Woolworths group, posted a huge 12.2% increase in sales over the past quarter.

And the Country Road group, which also includes Mimco and Witchery, posted a 14.2% increase in sales in Australia and New Zealand.

For comparison, Myer posted a 1.3% increase in sales for the second half of the financial year ending in June.

In a trading update released overnight, Woolworths said:

On a pro-forma comparable basis, David Jones sales (including concession sales) increased by 12.2%, in Australian dollar terms. Sales in comparable stores grew by 10.4% and net space grew by 1.5%.

Country Road Group sales in Australia and New Zealand increased by 14.2%, in Australian dollar terms. Sales in comparable stores contracted by 0.1% and net space grew by 24.9%, 17.4% of which was space reallocated from other brands in David Jones and therefore does not constitute additional space from a Group perspective.

Retail is a challenging sector in Australia at the moment: costs are high, wage growth is low, there’s fierce competition from online stores, and consumers haven’t been feeling terribly ebullient for most of the year.

But David Jones under its new management appears to be performing well. Myer announced a new strategy in September, which involves a $480 million capital investment and has a target of greater than 3% improvement in sales between next year and 2020.

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