Major department store chain David Jones of Australia has recorded a third consecutive year of sales contraction, the company announced in a trading update, with little sign the slashing of interest rates has encouraged consumer spending. The David Jones and Country Road Group, bought by South African retailer Woolworths Holdings in 2014 for $2.2 billion, have laid out plans for store closures and downsizing floor space to lean on the recent success of its online shopping. Online sales rose 46.8% and now account for 7.7% of total sales in the 52 weeks to end June. David Jones' like-for-like sales was 0.1% lower, and total sales were down 0.8%.

David Jones is downsizing its Sydney flagship store from two sites spread over 17 floors into one store with 11 floors and a food mezzanine, closing its Market Street branching and squeezing into the one Elizabeth Street premises. Natural light will stream in from huge windows on to an area the company has dubbed "shoe heaven". Above the shoes, in an area that was once offices for executives, will be a mezzanine with a champagne bar boasting commanding views over Hyde Park. But this transformation is costing David Jones in the short-term as the country struggles through a "retail recession".