David Jones to be acquired by private equity firm Anchorage Capital

Once a Goliath of Australian retailing, David Jones’ sad downfall cultimated today with a sale at a reported bargain basement price.

Eight years after iconic David Jones was sold for a whopping $2.1 billion, it has today been sold for a fraction of that price — just $100 million in what brings to an end a sad downfall for the one-time giant of Australian retailing.

David Jones will be acquired by private equity firm Anchorage Capital Partners, it has been confirmed, bringing the Australian business back into local ownership.

The iconic retailer’s current owner, Woolworths Holdings Limited (WHL), and Anchorage Capital Partners entered into a binding agreement today that will see Anchorage acquire the David Jones operating business.

The Australian reported the business was sold for $100 million.

David Jones is one of Australia’s leading omnichannel retailers, and the oldest continuously operated department store under its original name.

Founded in 1838, it currently has 43 stores across Australia and New Zealand and employs 7500 people.

Anchorage is one of Australia’s leading private equity firms with extensive experience in retail and consumer investments over 25 years.

It has fully backed Scott Fyfe as David Jones CEO, together with his management team, and plan to contribute their financial investment to accelerate the company’s existing Vision 2025+ strategy.

The deal is expected to complete by the end of March 2023.

David Jones will be acquired by private equity firm Anchorage Capital Partners, bringing the iconic Australian business back into local ownership.

The department store is speculated to have settled for a fraction of what it sold for a decade ago – between $120 million and $150 million – according to the Australian Financial Review.

Interestingly, the deal is not expected to include the department store’s flagship store on Melbourne’s Bourke St.

Woolworths Holdings issued a trading update on November 16 that showed David Jones had been delivering sales above pre-Covid levels.

“Trade in the prior period was impacted by the extended lockdowns, resulting in relatively higher growth rates in the current period compared to the prior period,” the company said at the time.

David Jones’ turnover and concession sales increased by 55.3 per cent for the period.

Anchorage is thought to be happy with the general direction of David Jones and will keep on CEO Scott Fyfe and peruse his strategy of store revamps, some reductions in floor space, higher end products and an increased focus on online.

But the company is also likely to cut back office costs too.

With more modern stores, more customers and online thriving, DJs might just be in the best shape it’s been for some time.

QUT professor of marketing Gary Mortimer said in the end something else may have to give to assure David Jones of its future in Australia.

“Ultimately, the target market of middle-to-high income consumers, may only be viable to sustain one flagship department store, located in each major CBD,” he told news.com.au.

— with Benedict Brook

Originally published as David Jones to be acquired by private equity firm Anchorage Capital