David Jones, the high-end department store chain in Australia, is undergoing a change in ownership. Its South African owner, Woolworths, is set to sell the business after acquiring it in 2014 for A$2.1 billion. While the exact purchase price has not been revealed, it is expected to be considerably lower than the initial acquisition cost. The sale is anticipated to be completed by March of next year.
Known for its extensive selection of European and American fashion and beauty brands, such as Alexander McQueen, Versace, Balmain, Coach, and Marc Jacobs, David Jones has built a reputation for offering luxury products. The purchase agreement with new owner Anchorage Partners involves the transfer of 43 stores, which includes some that had already been closed by Woolworths as part of its turnaround efforts. Anchorage Partners will also inject fresh funds into the company.
However, the sale does not include the Bourke Street flagship property in Melbourne, which is valued at A$250 million. It is expected to be sold separately next year, but David Jones will likely remain as a tenant in the building. Scott Fyfe, the CEO of David Jones, will continue to lead the company and has the support of the new owner in executing his revival plans, known as Vision 2025+, which focus on both physical and online sales.
While Woolworths Holdings will retain ownership of the Country Road group of retail chains in Australia, it is exiting the specific department store market. The company acknowledges that it will not recoup its investment in David Jones, as the turnaround for the business has taken longer than anticipated, leading to a write-down of its investment.
Despite its recent challenges, David Jones remains an attractive business. Anchorage Partners emerged victorious in the bidding process, beating out Teoh Capital. It is believed that David Jones turned a profit in 2021, marking its first profitable year since 2018.
Anchorage Partners specializes in investing in businesses that are underperforming or going through significant transformations. David Jones fits their investment criteria, as the company has faced numerous hurdles in the Australian market due to the rise of online shopping and the entry of international chains. The COVID-19 pandemic has further impacted the business.
Anchorage Partners sees tremendous potential in David Jones. A spokesperson for the company described the deal as a “landmark transaction,” emphasizing the brand value and assets of David Jones, including its extensive retail footprint, loyal customer base, and dedicated employees. Scott Fyfe expressed his enthusiasm for collaborating with the Anchorage team to strengthen the company’s position as Australia’s leading omnichannel retailer and one of its most beloved brands.
In conclusion, the sale of David Jones signifies a new chapter for the renowned Australian department store chain. With the backing of Anchorage Partners, the company aims to overcome its challenges and continue its legacy as a premier retail destination in the country.
Useful links:
[1. David Jones Official Website](https://www.davidjones.com)
[2. Anchorage Partners Official Website](https://www.anchoragepartners.com.au)
