David Jones’ operating profit fell 42 percent to $37 million in the 2019 financial year, hampered by tough trading conditions and little economic growth in the Australian market.

Parent company Woolworths Holdings chief executive Ian Moir said the performance was fair considering the conditions, and that the management team has adapted their strategy to the changing retail landscape.

“Our businesses are well-positioned to see through the significant economic and structural challenges retailers are facing,” Moir said in a statement to investors. We are focused on building future-fit, customer-focused businesses with strong portfolios of brands that deliver long term value.”

The South African retail group said it didn’t expect conditions to improve significantly in the short-term, with the retail market continuing to be tough due to heavy discounting and promotional material.

As such, Woolworths Holdings said the previously announced plans to reduce store count is underway across the David Jones portfolio to improve stock productivity as online sales grow. David Jones didn’t specify which stores are being closed.

The 2019 financial year also saw turnover and concession sales fall 0.8 percent for the department store, and comparable sales fall 0.1 percent. However, online sales grew 46.8 percent and now makeup 7.7 percent of total sales.

Moir saidhe believes “the worst is over” for the struggling department store chain.

“We’ve had many bad years at David Jones and learned many lessons, We know more about the Australian customer through fixing the David Jones business because we have collected data and research about what they want. We believe the worst is over. The year 2021 will be a much stronger year for David Jones.”

Moir will relocate to Sydney to oversee the turnaround more closely, as he understands the Australian market from his time running Country Road Group.