David Jones collapse hits Woolies, despite it selling the unit in 2023

Résumé détaillé

Country Road has nearly 300 concessions at the department chain that will close half its stores.

The collapse of Australian department store chain David Jones (popularly known as ‘DJs’) into administration last week will mean a hit for Woolworths Holdings’ unit in that country, Country Road Group, despite the retailer disposing of DJs in 2023.

It eventually found a private equity buyer for the business, Anchorage Capital Partners, which paid about R1.5 billion – significantly less than the R21.5 billion Woolies paid for it in 2014.

Read: Woolworths’s R21.5bn Australian gamble ends in David Jones collapse Failed Australian chain David Jones in limbo in hunt for buyer Failed Australian chain David Jones to close half its stores

Buried in a shock trading update on Wednesday, Woolworths warned that: “Various Country Road Group brands trade as concessions within David Jones, which has been placed into administration and receivership.

“We are in communication with the appointed receivers and managers and are assessing what this means for the continued trading relationship.”

The Australian Financial Review (AFR) reported last month that Country Road Group would cut nearly 100 of the 280 Country Road, Witchery, Politix, Trenery and Mimco fashion and accessory concessions it operates across the David Jones store network.

The cuts were planned for February, and the AFR reports that Mimco is the brand that will see the biggest reduction in space and presence at DJs.

This will be a drag on Country Road sales, which were barely positive (+1%) in the year to the end of June.

This would be bad enough, but receivers FTI Consulting said on Wednesday that it would undertake an “urgent restructure” of David Jones which would see half its store network – 19 stores – shuttered.

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