David Jones’ half-year operating profit has fallen 37.7 per cent to $66 million, compounding the woes of Australia’s beleaguered department store sector.

Reporting its results for the six months ended 31 December overnight, DJs South-African based parent Woolworths Holdings said that the department stores’ top-line sales fell by 3.8 per cent in the half, while comparable store sales were 3.3 per cent lower.

It said that trading was “particularly difficult” in the first quarter, with sales improving the December quarter, concentrated over the last-six holiday weeks.

Woolworths’ other Australian business, Country Road Group, booked a half-year operating profit of $59 million, increasing by 15.7 per cent on a 5.2 per cent in top-line sales.

Comparable sales fell by 1 per cent, which Woolworths said was “in line with the market”.

DJs operating costs increased by 9.7 per cent, associated with new stores, a new merchandise system and other transformational initiatives such as its food hall – which management said was trading well.

Woolworths blamed challenging market conditions for the poor performance in David Jones, and the Politix brand for constrained comparable sales within Country Road Group.

It said efforts to realise trading space efficiencies within DJs progressed in the first-half, with net trading space reduced by 2.2 per cent.

A strategic cost revenue is also underway within the business, after a $712 million write-down on the value of the business was booked in January.

Country Road Group saw operating costs increase by 10.5 per cent on a 9.1 per cent increase in store costs due to the inclusion of the Politix brand. Retail space within the CRG network reduced by 3.8 per cent on the closure of under-performing stores.

“Many of the transformation initiatives at David Jones are moving towards completion and the Country Road Group remains resilient and increasingly profitable in a tough market,” Woolworths Holdings CEO Ian Moir said.

“We believe we have the right strategies in place to build on these improved conditions and make sure our businesses are uniquely positioned to reap the benefits of our investment in people and systems when the cycle turns.”

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