What: The Australian department store company is being sold off by its owner, the South African retailer company Woolworths to Anchorage Capital Partners.

Why it is important: David Jones, just like Myer’s, has been lagging in terms of profitability for a number of years, as the Australian market is increasingly polarized.

Woolworths Holding, the South African retail giant who bought Australian David Jones in 2014 for $1.41bn, is reported to sell the company to Anchorage Capital Partners, a private equity firm. According to the newspaper, the selling price would be between $120m and $130m and the deal should be closed before the end of this year.

Woolworth has created an agreement with Anchorage Capital Partners due to a disappointing return on investment, resulting in Woolworth’s withdrawal from the department store market and Anchorage’s takeover of 43 stores, some of which had already closed as part of Woolworth’s turnaround efforts.

It is specified that David Jones' flagship on Bourke Street is not included in the sale and that with its estimate of AUD 250 million it would likely be sold next year. The current CEO, Scott Fyfe, is expected to stay on, with the new owner backing his recovery plan (referred to as Vision 2025+), with the company expected to continue to focus on physical and online sales.

David Jones, after suffering from the Covid-19 pandemic like other retailers, turned a profit in 2021 for the first time since 2018, and revamped its flagship stores in Sydney and Melbourne.

David Jones to be sold to private equity firm SOURCE 1

David Jones to be sold to private equity firm SOURCE 2