Financial pain of outer suburbs fuelled demise of David Jones, experts say

Résumé détaillé

After 188 years, David Jones announced it would close 19 stores, most of them in Sydney's outer suburbs.

David Jones is closing 19 stores across Australia and New Zealand, with the majority to close in metropolitan outer suburbs.

Property analyst Howard Penny says outer suburbs were disproportionately feeling mortgage stress.

According to retail expert Gary Mortimer, a changing business model is forcing major suburban centres to adapt to survive.

Acute economic pain being felt in the outer suburbs may have accelerated the demise of David Jones, according to property and retail experts.

The 188-year-old shopping giant announced on Wednesday that it would close 19 stores across Australia and New Zealand, with the vast majority being in metropolitan outer suburban areas.

Among those are stores in areas like Hornsby, Parramatta and Campbelltown in Sydney, Maribyrnong and Glen Waverley in Melbourne, and Robina on the Gold Coast.

Howard Penny is the head of Real Estate and Infrastructure Research for Australia and New Zealand at Citigroup.

He said that was a symptom of the financial strain in those areas after five interest rate hikes this year.

S&P Global Ratings data this week revealed that households in some outer suburbs in Sydney, Melbourne and south-east Queensland are more than twice as likely to be experiencing mortgage stress than the national average.

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