David Jones to close menswear store in Melbourne’s Bourke St Mall
Struggling department store chain David Jones shocked shoppers when it announced the closure of its Bourke St Mall men’s store. This is what’s to come for the retail giant and its famous CBD shopping site.
Business
Don't miss out on the headlines from Business. Followed categories will be added to My News.
David Jones says it does not expect major job losses to flow from its move to close one of its flagship stores located in Melbourne’s Bourke St Mall.
The up-market department store chain said it plans to find new roles for workers currently employed at its menswear store at 299 Bourke St, which it will sell and close.
The roles will open up at its larger flagship womenswear store, located opposite the menswear store at 310 Bourke St, which it will refurbish.
That store will also house menswear when the refurbishment is complete.
Some space in that store used for offices will be converted to retail space.
A David Jones spokesman this morning said the introduction of new categories at 310 Bourke St, as well as a push to increase service levels, meant the retailer did not expect mass staff lay-offs to flow from the store changes.
“We do not expect a significant impact on roles as we are enhancing 310 Bourke St and taking all our categories across including with elevated premium service levels,” the spokesman told the Herald Sun.
The spokesman noted there was also the ability to redeploy workers across other David Jones stores or throughout the retailer’s sister business, Country Road Group, which owns brands Country Road, Mimco, Politix, Trenery and Witchery.
This would be the first priority should roles be impacted, he said.
The new-look store at 310 Bourke St will be completed in 2021, by which time David Jones plans to have sold and exited 299 Bourke St.
David Jones has employed a similar strategy in Sydney, selling its flagship menswear store in Market Street in 2016 and spending $200 million of the proceeds to overhaul its Elizabeth Street property.
Australian Retailers Association executive director Russell Zimmerman said the pressure on department store chains ranging from David Jones to Big W had been well documented.
While the move by David Jones to reduce its footprint was not a surprise, Mr Zimmerman expressed concern for those who worked at the menswear store.
“My big concern for any of these changes is around staffing,” Mr Zimmerman said.
“We don’t want to see any more job losses.
“They (David Jones) can’t afford to keep floor space in this day and age … I think they will look at every site in Australia to maximise usage of spaces.”
David Jones and Country Road Group are owned by South African retail heavyweight Woolworths Holdings, which is not related to the Australian retailer of the same name.
Chief executive Ian Moir said the sale of the menswear store would allow the retailer to create a “cohesive single-store experience” in the heart of Melbourne.
“A single-store flagship housing the best local and international brands in one world-class destination will create a more seamless and cohesive experience for our customers,” he said on Tuesday.
David Jones will appoint a real estate agent to manage the sale of 299 Bourke St in the next couple of weeks.
It would not say how much it thought the building, which houses its food hall, was worth.
Real estate industry analysts said the prime slice of retail real estate should fetch more than $100 million.
A one-third stake in Myer’s Bourke St Mall store sold for $151.3 million in 2016.
That store had been refurbished and spans 40,000 square metres. The David Jones store at 299 Bourke St covers 14,000 square metres.
5 STEPS TO TAKE AFTER RBA RATE CUT
KATHMANDU SNAPS UP ICONIC SURF BRAND
Woolworths Holdings slashed the value it puts on David Jones in its books by $437 million in August, declaring Australia was in a retail recession.
The writedown added to a $712 million impairment taken against the value of David Jones in 2018.
Woolworths Holdings paid $2.1 billion for the nation’s oldest department store chain in 2014.
David Jones acquired 310 Bourke St when it bought former department store chain Buckley & Nunn in 1982. It bought 299 Bourke St, built by Coles, in 1986.
Originally published as David Jones to close menswear store in Melbourne’s Bourke St Mall
How the NBN has delivered just in time
The NBN has delivered, and it has done so in what can only be described as the ultimate — the hit-the-ground running immediate — stress test, rites Terry McCrann.
Sydney airport the wrong place at the wrong time
Sydney Airport has some of the sweetest acreage in Australia but when passengers numbers have dwindled from 9 million in the March quarter to 400,000 in the June quarter, that doesn’t count for much, writes Terry McCrann.