By Richard Willingham, Madeleine Heffernan and Carolyn Cummins
Melbourne is set to become the country's department store capital, with venerable 178-year-old chain David Jones planning to shift its headquarters from Sydney to Melbourne.
David Jones' owner, South African retail giant Woolworths, said Melbourne was the fashion and retail capital of Australia. Its real estate costs are also cheaper.
David Jones was opened by a Welsh immigrant of the same name on the corner of George and Barrack streets, Sydney, on May 24,1838. He said he wanted to sell "the best and most exclusive goods" and to carry "stock that embraces the everyday wants of mankind at large".
Now, David Jones' new owner has outlined a new headquarters in inner-city Richmond for all its businesses, including David Jones, Trenery, Country Road and Mimco.
David Jones says Melbourne is the 'the fashion capital of Australia'.Credit: Sasha Woolley
Woolworths Holdings will invest $240 million in Victoria with the new Richmond building and distribution centre in Truganina in Melbourne's west.
Following completion there wil be about 600 David Jones employees and 680 Country Road Group employees at the new Richmond headquarters.
Melbourne the 'fashion capital of Australia'
Woolworths chief executive Ian Moir said it was a "no brainer" to consolidate all of its businesses in Melbourne.
"Melbourne really is the fashion centre, the fashion capital of Australia, it's the retail centre of Australia," Mr Moir said.
Woolworths chief executive Ian Moir said it was a "no brainer" to consolidate all of its businesses in Melbourne.Credit: Maarten Holl
He said real estate costs were better in Melbourne than Sydney.
Rival department store chain Myer opened its flagship Myer Emporium in Bourke Street, Melbourne in 1911, and its national headquarters is on Collins Street, Docklands.
David Jones's Elizabeth Street store in Sydney will undergo a $200m revamp. Credit: Wolter Peeters
While it's shifting its headquarters, David Jones' Elizabeth St store in Sydney will undergo a $200 million redevelopment in the second half of 2017 and will be expanded from a seven-level store to 11 levels.
The retailer says the move was "not about reducing headcount" or saving costs and that the "current complement" of David Jones staff would remain the same.
Premier Daniel Andrews: ''First home buyers are facing more hurdles than ever."Credit: Andrew Meares
It said the hundreds of Sydney employees affected would be offered relocation assistance.
Elizabeth Street store the 'new benchmark'
Mr Moir said in a statement that David Jones Elizabeth Street will have the best store design and create a new benchmark in Australian retail.
It will house "world class" food and dining and level seven will be home to a restaurant that will be developed in partnership with renowned Australian chef Neil Perry.
The store will also feature a new and larger food hall with a wider offering.
Jobs boost for Victoria
Victorian Premier Daniel Andrews said his government had worked with the company to facilitate the 820 new jobs for Victoria, but he would not reveal how much taxpayer money was spent to secure the major project.
He cited the facts that Melbourne Airport had no curfew and that Melbourne port was the largest in Australia among the reasons businesses were making the city home.
"We are very proactive and working very hard to keep Victorians in work," Mr Andrews said at a morning press conference at David Jones' Bourke Street store.
"I can guarantee and assure all Victorian taxpayers that this is great value for money, because these are strong jobs in a strong business."
Woolworths bought David Jones and Country Road for more than $2 billion in 2014.
It flagged its desire to sell its properties a year ago to free up capital to improve other parts its business, including its Elizabeth Street store.
As part of the growth, David Jones is opening a range of new-look stores in the coming year, including a smaller format store at Barangaroo, Sydney, a full-line store at AMP Capital's Pacific Fair and in Wellington, New Zealand.
The 1400-square-metre store at Barangaroo is the new small format, like the existing outlet at Malvern in Melbourne. It will also be weighted towards online shoppers.