David Jones is worth $437 million less today than it was yesterday — and it's blaming a 'retail recession' that technically doesn't exist

• David Jones is worth approximately $437 million less in the eyes of its South African owner Woolworths, as it announced it was downgrading the department store based on the Australian retail environment.

• Woolworths (no relation to the Aussie supermarket giant) must be regretting ever purchasing DJs back in 2014, with the store now worth less than half of the $2.2 billion it shelled out for it.

• Despite challenging conditions that have seen Australians spend less, and some retailers shutter their doors, others have managed to adapt and thrive.

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David Jones might be one of Australia's most iconic department stores but it is quickly proving toxic for its South African owner, Woolworths.

Since forking out $2.2 billion for it in 2014, Woolworths (no relation to the Aussie supermarket giant) has been forced to write down DJs time and time again. This week was no different as it slashed an eye-watering $437 million off its valuation, blowing a gaping hole in its balance sheet.

The latest downgrade means David Jones is now worth $965 million — less than half of what Woolworths paid for it just five years ago.

Woolworths blamed the write-down -- called an 'impairment' -- on the reluctance of Australians to spend as the main culprit, in an announcement to the Johannesburg Stock Exchange.

"The impairment reflects the economic headwinds and the accelerating structural changes affecting the Australian retail sector as well as the performance of the business, which has fallen short of expectations. The [Woolworths] Board believes that the valuation of David Jones is realistic and reflective of its prospects," it stated.

A company spokesperson then doubled-down.

"The retail sector in Australia is currently in recession and the Australian economy has slowed to its weakest level since the global financial crisis in 2009," he told the Sydney Morning Herald following the announcement.

But is that true or just a convenient excuse?

While NAB analysts claimed in May that retail is "clearly in a recession", that's not technically true.

The latest retail sales numbers show a very modest uptick of 0.4% in June, after a couple of months of consecutive declines, but it doesn't satisfy the definition of a 'retail recession'.

"With volumes rising this means the sector doesn’t meet the usual recession criteria -- two quarters of negative growth in volumes," BIS Oxford Economics chief economist Sarah Hunter said in a note on the figures.

That's not to say retailers are out of the woods by any means.

"But this is unlikely to provide much comfort to retailers, and with volumes barely increasing it suggests that we’ll see another weak print for consumer spending in the June quarter national accounts," she added, describing bricks and mortar retail as "very challenging".

Certainly, many Australian retailers are doing it tough at the moment. Just last year, Rodger David, Topshop, Ed Harry and others shuttered their doors for the last time, as a record number of Australian brands went bust.

Consider this chart mapping retail failures last year.

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But just because Australians are spending less on clothes, it doesn't mean stores can't survive or even adapt and thrive.

The Brand Collective has told Business Insider Australia that it intends to open three new Superdry stores in Australia (and another in New Zealand) in August and September.

"Where others might see obstacles, we see a significant opportunity within the national retail market,” CEO Martin Matthews said in a statement.

Superdry credits the expansion of its brick and mortar business to its ability to adapt. Targeting growing e-commerce and tourist spending for example, it has hired influencers on Chinese social media platforms WeChat and Weibo to move into the Chinese market.

So what is David Jones doing?

Since 2012, it has embarked on a strategy of consolidating the number of stores it has, refurbishing others and moving towards more expensive luxury items from overseas as a point of differentiation. It has also focused on growing its online business.

Despite those moves, it, along with other department stores like Myer, continue to struggle.

Up to its fourth CEO in just five years, it's clear DJs isn't having much luck.

But unless it comes up with a few new ideas, it risks more mammoth losses.