Retail gloom forces David Jones writedown

DAVID Jones’ South African owner will take a $713 million writedown on the value of the department store chain as Australia’s tough retail market bites.

DAVID Jones’ South African owner Woolworths will take a $713 million writedown on the value of the department store chain as Australia’s tough retail market bites harder into the business.

Woolworths has told the Johannesburg Stock Exchange that it will take a $712.5 million non-cash impairment on the carrying value of David Jones in recognition of “the cyclical downturn and structural changes that have impacted performance across the Australian retail sector”.

“The impact of these changes has been exacerbated by poor or delayed execution in certain key initiatives,” Woolworths said in a statement. However the South African group, which also owns Country Road in Australia, said it is committed improving David Jones and will continue to invest in the business.

Woolworths earlier this month announced David Jones’s sales for the six months to December 24 were down 3.3 per cent, on a same-stores basis, on the preceding half year.

The company cut David Jones’s retail floorspace by 2.2 per cent during the 2017/18 first half as part of an ongoing “space optimisation” program and in 2016 sold the retailer’s Market St, Sydney, building to Scentre Group.