A retail professional has warned that division retailer big David Jones may “finally falter” amid an ideal storm of dire financial situations and ongoing hardships being confronted by the long-lasting Aussie model.
Dozens of workers will probably be impacted after the corporate introduced one in all its flagship shops on the Eastland Shopping Centre in Ringwood, in Melbourne’s east, would shut from January subsequent 12 months.
The transfer means solely seven David Jones shops will probably be left standing within the Victorian capital.
Some have feared the newest transfer may sound the dying knell for large-scale Australian department shops throughout the nation amid an ideal storm of inflation, rising prices of residing and poor foot site visitors placing stress on gross sales.
But retail advertising and marketing professional Louise Grimmer mentioned such conversations had been “cyclical” and division chains may “rise like a phoenix from the ashes”.
“This time around, though, the economic outlook is particularly gloomy, with huge pressures on household budgets and discretionary spend,” Dr Grimmer, a senior lecturer on the University of Tasmania, mentioned.
“In addition, wages have stagnated in this country for a number of years … and at a really bad time with continuous rate rises in the lead-up to Christmas.
“These factors are perhaps a perfect storm that could see David Jones finally falter.”
There are 42 David Jones shops positioned throughout the nation, using greater than 7500 folks.
The announcement of Ringwood’s closure is the newest in a collection of setbacks for the Australian-based chain.
In 2020, it closed its Fortitude Valley retailer in Brisbane after simply three years of buying and selling.
The firm’s boutique Barangaroo retailer in Sydney was mothballed on the top of the Covid-19 pandemic in 2020 after opening in 2016.
Last 12 months, the one David Jones retailer in Wellington, New Zealand, was closed.
Dr Grimmer mentioned an answer was for the division chain to “get back to basics” – by enhancing service and refocusing itself as a “luxury business” as an alternative of being “middle of the road”.
She pointed to “woeful” service within the David Jones department shops throughout the nation and the way it struggled to distinguish from manufacturers like Myer and even Kmart.
“Somewhere along the way, the brand has lost its meaning – it’s now trying to be all things to all people – offering top-end products as well as those more affordable options,” Dr Grimmer mentioned.
“(If) David Jones are going to continue to offer expensive, high-end luxury products, they must have the store experience, the online experience and the customer service to match.
“At present all these elements are out of kilter.
“Many of the competitors in the form of specialty stores are winning the race – both in-store and online.”
In an announcement, a David Jones spokeswoman reiterated the corporate “was focused on delivering world-class products and experiences … both online and in-store as Australia’s leading omnichannel retailer”.
“Key to delivering this experience is our ongoing program of retail network optimisation, which includes refurbishing our stores, right-sizing and, where necessary, consolidation of our footprint,” the spokeswoman mentioned.
The spokeswoman confirmed the Eastland retailer could be shut from January.
“Our strategy was shared widely with our team members and customers in January 2023, and we will continue to provide updates as we evolve and grow our business,” she mentioned.
The spokeswoman didn’t reply questions relating to the variety of shops closed throughout Australia.
She additionally didn’t state what number of workers could be impacted by the Eastland retailer closure however acknowledged: “We are going through a consultative process and 97 per cent of our team members have redeployment opportunities.
“We look forward to welcoming our Eastland customers online and to our other nearby store locations.”
The 185-year-old Aussie division retailer model was bought for a staggering $2.14bn by South Africa’s Woolworths Holding Ltd (WHL) in 2014.
But final 12 months it was bought to Sydney non-public fairness agency Anchorage Capital Partners.
David Jones’ iconic Bourke St retailer in Melbourne – value about $250m – was not included within the deal.
“This new partnership has added renewed vigour to the world’s oldest continuously operating department store, and we’re excited to seize the momentum and take our rightful place as Australia’s most iconic shopping destination,” David Jones chief Scott Fyfe mentioned in March final 12 months.
“With the support and financial commitment of Anchorage, we’ve secured the right investment to lead Australia’s retail industry into the future.”
In its 2023 annual report, the WHL Group acknowledged David Jones contributed one of many highest earnings to the Group since its 2014 acquisition regardless of the sale.
The report states the corporate extracted $R3.3bn ($A267m) in money and retained the $A250m Bourke St property.
David Jones was bought for $R1.1bn ($A89m), the doc states.
“The sale also enabled us to remove $R22bn ($A1.7bn) of liabilities, including $R18bn ($A1.47bn) of lease liabilities, from our balance sheet, which further strengthened the Group balance sheet and enhanced our financial performance metrics,” WHL Group’s interim chief monetary officer Zaid Manjra wrote.
Originally revealed as ‘Perfect storm’: Fears iconic Aussie model David Jones may falter as shops shut, cost-of-living disaster bites
Source: www.dailytelegraph.com.au
