David Jones Cuts Floorspace, Sells Property
David Jones’ parent company has received a number of offers on its remaining properties as the company looks to downsize and extinguish debt.
Johannesburg-listed Woolworths Holding Limited plan to drop its David Jones footprint by 20 per cent in the next two years as well as the food component of those stores.
The group is taking a “hard look” at its Australian real estate portfolio including remaining properties as well as rental agreements.
The company’s results were boosted by the sale of Bourke Street menswear building for $121 million to Newmark Capital.
Woolworths Holding Limited chief executive Roy Bagattini said they have received several non-binding indicative offers on their remaining stores and were also looking to reduce rental costs.
“We’re well into a process with the remaining properties in David Jones and are really encouraged by the strong level of interest we are seeing,” Bagattini said.
“Pivotal to our cost component is our real estate, the number of stores we have and the number of spaces we have.”
Bagattini said they were looking to shift capital towards digital transformation, moving from larger malls to smaller more convenient stores and were taking lessons from the positive results seen their new Elizabeth Street store.
“Although some progress has been made our David Jones business has simply not transitioned fast enough, while it's arguable some of its challenges have been more structural there are several identified opportunities for performance,” Bagattini said.
“We are seeing a marked shift in the way people shop and want to engage.
“These trends have been accelerated and accentuated during covid and we anticipate they will endure into a post covid world.”
Group chief financial officer Reeza Isaccs said despite the difficult conditions they were very pleased with the the group has landed .
“David Jones traded through and performed reasonably in line with 2019 even after Asian tourism stopped, but one can see the decline post social distancing and restrictions on movement and the pickup subsequently helped by promotions and clearance,” Isaccs said.
In Australia retail turnover dropped 4.2 per cent in August compared to July however this was up by 6.9 per cent when comparing to last year according to the latest results by the Australian Bureau of Statistics.
