What: Inside Retail review the various hypotheses following David Jones’ acquisition by a venture capitalist company.

Why it is important: Even though this is pure speculation, the article sheds some light on the state of the Australian retail market, and the difficulties experiences by department stores in the country.

Inside Retail explores what the acquisition of David Jones by Anchorage (at an estimated discounted price of $100m, to be compared to $2.1 bn paid in 2014 by Woolworths Holdings) might mean for the retailer. After all, the purchase of Myers’ in Australia by TPG did not turn out so well so this might be a cautionary tale.

Inside Retail recalls that Anchorage already invested in retail, with the acquisition of Brand Collective, then unprofitable in 2014. As soon as the deal was closed, Anchorage approved the acquisition of another brand by Brand Collective, invested into a new ERP, and turned the retailer into a $280m business, sold earlier this year with a profit. However, the newspaper also recalls that, on average, 70% of businesses acquired by venture capitalists fall, as exemplified by electronic chain Dick Smith, bought by Anchorage in 2012 and which collapsed in 2016.

Inside Retail believes that the potential strategies for David Jones will be to reduce the retail footprint, develop ecommerce, and maximize the leverage of its brand perception on the domestic Australian market.

What the acquisition of David Jones by Anchorage might have in store