* Quarterly sales edge up, but miss forecasts
* Trade still challenging
* Says online site crash due to demand and "fixable"
* Shares down 7 percent to two-month low
(Adds shares, comment)
MELBOURNE, Nov 21 Australian department store
David Jones Ltd posted its first rise in quarterly
sales in two years, but missed forecasts and said trading
remains challenging ahead of the key Christmas period, knocking
its shares down 7 percent.
David Jones, which will offer Christmas internet shopping
for the first time this year as it tries to match online rivals,
said it was too early to declare a bottoming-out in consumer
"It's still challenging," said Chief Executive Paul Zahra.
"We're not seeing the volatility in trading but we have not,
certainly, seen any change in consumer sentiment. It's
competitive," he said.
David Jones and other large retailers such as rival Myer Ltd
have been scrambling to ramp up their online stores as
they lose sales to offshore competitors.
However, a "Click Frenzy" staged event this week -- a local
version of successful U.S. online shopping sale "Cyber Monday"
-- was dubbed "Click Fail" by social media after the site
crashed and thousands were unable to shop as planned.
David Jones ran its own online shopping promotion rather
then join Click Frenzy, but its website also crashed.
"The site simply went into meltdown, it could not cope with
the traffic," said Zahra. "It's a capacity issue that's all.
Zahra said the store still posted record online sales for
David Jones did not provide sales or earnings forecasts.
Myer said last week it was stocking its stores prudently for a
worst-case scenario of flat Christmas sales, although it could
quickly access more stock if sales rose as expected.
David Jones sales rose 0.3 percent to A$415.6 million
($431.1 million) in the three months to Oct. 27, below analysts'
expectations for a 0.7 percent gain, according to a Reuters
survey of six analysts. Sales growth had continued at that level
"It's just simply not enough," said Peter Esho, analyst at
"Management needs to be more proactive and not just wait
for the market to improve. Comparable sales growth numbers need
to grow into the order of 2-to-5 percent through the rest of the
year before the market starts to get excited," he said.
David Jones shares were down 6.6 percent at A$2.40 at 0325
GMT, near a two-month low.
($1 = 0.9640 Australian dollars)
(Reporting by Miranda Maxwell; Editing by Richard Pullin)