"We've got to get less stores and less space in the lower demographic areas, we've got to exit any marginal or undesirable leases," he said. Loading Initially the company had indicated it would exit those leases on expiry, but Mr Moir said on Thursday he was planning to do it earlier by getting "more aggressive" with landlords. "You have to create partnerships with some landlords and take a more aggressive stance with other landlords, but we are absolutely focused on getting our space down," he said. David Jones' biggest landlords include large listed property players such as Vicinity Centres and Scentre Group.

He would not say which stores would close, nor how many, though he said regional locations was a "reasonable assumption". He noted a reduction in space also meant shrinking existing stores by cutting the number of floors it occupied. "That means less of some categories bit more of others, different brands, taking some brands out, and introducing different brands," he said. It's still going to be a very tough marketplace. I think retail is still going to be in the middle of real strategic structural change. Woolworths Holdings chief executive Ian Moir "In some of those big stores, we've got a lot of space we don't really need because the model has changed. So we can have a much more profitable offer on much less space." Mr Moir will also be moving to be primarily based in Australia, saying he wanted to personally see the David Jones transformation completed.

The company also flagged an additional $13 million in cost savings in the business, which Mr Moir said was from cuts across "every single area" of the business, including marketing and travel costs. Conditions were marginally better at Woolworths Holdings' Country Road Group, which manages the Country Road, Mimco, Trenery, Witchery and Politix brands. Operating profit dropped 2.9 per cent to $100 million, though comparable sales were up 0.6 per cent. However, Mr Moir said he was also looking to exit undesirable leases at stores in the Country Road Group. He said the company would look to negotiate more turnover related leases rather than ones with fixed price increases. Online growing well Online continued to be a bright spot for both David Jones and Country Road, growing across both and contributing to 20.3 per cent of total sales at Country Road.

David Jones' online penetration currently sits at 8 per cent, with Mr Moir hoping to grow that to 20 per cent in five years with the online operations "much more" profitable than its physical locations. Loading He dismissed the possibility of the brand being online only, however, saying high-end customers who spend "big bucks" will always want to see the product. Woolworths predicted Australian sales for the group would grow off the back of improved consumer spending, though comparable sales growth in the first seven weeks of the current financial year had dropped 1 per cent at David Jones. The lacklustre result followed disappointing earnings at discount department chains Big W and Target. Target's parent company, Wesfarmers, also flagged store closures as it grapples with soft consumer spending.