Tuesday, 3 August 2010

The Gloss Goes Off Australia's Luxury Department Store - 3/8/10

Australia's luxury and oldest department store David Jones, with a seemingly unblemished history spanning 172 years, well known for their 'pied de coq' (hounds tooth) logo and the international luxury fashion they brought to Sydney post-war with Parisienne themed parades in 1947 introducing Pierre Balmain and a year later with the collection of Christian Dior's famous 'New Look', the first time Dior had ever shown outside Paris.

David Jones pride themselves on representing and nurturing local premium and contemporary fashion, accessory and beauty brands. Receiving enviable amounts of positive publicity on their celebrity dotted and beautifully orchestrated launches and the strategic 'designer exclusives' they are able to negotiate. But today, they find themselves in the news for all the wrong reasons.

Following on from the abrupt resignation on 18 June this year of Mark McInnes, David Jones' former CEO who was at the helm for a seven year period, clearly a resignation was simply not enough. In what is a landmark claim that was lodged yesterday in the Federal Court, Ms Fraser-Kirk, a 25 year old junior publicist said McInnes made unwelcome sexual advances toward her and she seeks punitive damages of 5 percent of the company’s profit and McInnes salary and benefits for the seven years he was at the helm, i.e. between 2003 and 2010. The amount comes to at least A$37 million. Any punitive damages awarded through the lawsuit would be donated to a charity helping those affected by sexual misconduct in workplaces, Fraser-Kirk said during today’s press conference.

The new CEO Mr Paul Zahra clearly affirmed the company profit forecast and the company’s strategy of targeting affluent female customers with designer fashions in cities and high-income suburbs. David Jones advised they will “defend the claims vigorously” and won’t comment while the matter is before the courts, the company said in a statement yesterday .

David Jones shares fell on this news yesterday and on the eve of their bi-annual spring/summer 2011 launch today at the flagship Elizabeth Street store, it is going to be difficult for David Jones to dodge this bullet. Affirmative action will need to be seen to be actioned by David Jones, a department store with a very strong and loyal customer base, a large portion of those being female.

Image credit: davidjones.com.au

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Melinda O’Rourke is the founder and Director of MO Luxury, a dynamic, Sydney-based management firm specialising in luxury brands and services. Melinda and her associates at MO work with local and international brands across prestige retail, fashion, fine jewellery, timepieces and specialised services. Melinda is well-connected, well-read, and well-versed in the demands of the luxury market and its client base. Her advice is firmly based in objectivity and ultimately, accountability. Melinda offers constructive counsel and both strategic and creative thinking and is able to draw upon a strong network of specialised talent to compliment the MO Luxury team as needed. Melinda enjoys excellent industry relationships and is regularly quoted in the business and fashion media. Read more about MO Luxury, www.moluxury.com.au