When the David Jones deal is finally inked,the buyer,private equity group Anchorage Capital,will take another stab at reviving the grande dame of department stores – a sector that has been eroding in value for arguably close to two decades and whose fortunes were additionally disrupted by online shopping.
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The sellers,South Africa’s Woolworths Holdings (not to be confused with Woolworths,the Australian supermarket chain that is branching into pets) acquired David Jones for $2.1 billion almost 10 years ago. Admittedly,some David Jones prime CBD property has been sold – but even after this is factored in,it has been a horrible commercial experiment for the South Africans.
For the buyers,the potential to make a good return from David Jones is greatly enhanced by the lower price tag.
Anchorage Capital’s challenge will be to improve the relevance of David Jones to a generation of shoppers for whom department stores are not integral to the shopping experience.
Meanwhile,the decision by Woolworths (the Australian grocery group) to buy 55 per cent of Petspiration for $586 million is a commercial nod to the escalating trend in dog ownership (70 per cent of homes now own pets and most are dogs) – and the propensity to treat them like children.