Shares for Woolies boss after DJs deal

IAN Moir, the boss of South Africa’s Woolworths Holdings, has exercised $1.8 million worth of share options in the retail giant.

IAN Moir, the boss of South ­Africa’s Woolworths Holdings, has exercised $1.8 million worth of share options awarded to him in the retail giant, in a major vote of confidence in his decision to launch this year’s $2.2 billion takeover of Australia’s up-market department store David Jones.

The options were handed to him by the Woolworths board for his performance to date under the company’s restricted share plan.

The Scottish-born Mr Moir, who formerly ran fashion group Country Road before taking the reins at its parent company Woolworths, has 260,000 shares worth a total of 18 million rand ($1.8m).

Public Investment Corporation, a South African government pension fund and one of the largest investment managers in Africa, has also increased its exposure since Woolworths sealed its bid for David Jones in July. Its holding rose to 17 per cent to cement its place as the retailer’s biggest institutional shareholder.

David Jones’ new owners, led by Mr Moir, are wading through a strategic review of Australia’s second biggest department store, with the chain’s smaller ‘‘village-style’’ store format quickly emerging as a key growth platform for Woolworths to expand David Jones’ reach and profitability.

The village format is typically one-third the size of a standard David Jones department store and has a greater weighting to fashion and beauty, with about 75 per cent of floor space devoted to the category against 60 per cent in larger David Jones stores.

Helping to refine Woolworths’ strategy to transform David Jones will be Patrick Allaway, currently a non-executive director of local supermarket wholesaler Metcash, who last week was appointed to the Woolworths board, effective from December.

Mr Allaway was the chairman and co-founder of a privately-owned boutique advisory and funds management business, Saltbush Capital Markets, and is also a former non-executive director of Macquarie Goodman.

The former investment banker should prove a good sounding board as the South African-­dominated Woolworths board steers David Jones through its expansion plans in the midst of a challenging trading environment and reworks its relationship with suppliers to devote more floor space to ­Woolworths-owned private-label apparel.

Woolworths wants to extract $130m in extra earnings from David Jones within five years, with a stronger private-label offering and the fatter margins that accompany the category to help bolster profits.

Other changes to be pushed through by the 176-year old department store’s new owners will include stripping out underperforming fashion brands, a better constructed shopper loyalty scheme and a review into the category mix across the store floor to reflect the changing needs of shoppers, such as the floor space devoted to categories like beauty, housewares and children’s clothing.