By Emma Koehn
The sale of upmarket department store David Jones will give former owner Woolworths Holdings the opportunity to invest in growing Country Road Group’s iconic fashion brands in Australia and South Africa.
Woolworths Holdings boss Roy Bagattini told analysts on Wednesday evening that the South African company’s decision to offload DJs to private equity firm Anchorage Capital would free up the group to focus on expanding the reach of its labels including Country Road, Mimco, Trenery, Witchery and Politix.
Woolworths Holdings says it has the capacity to grow Country Road Group brands now it has sold David Jones.Credit: Glenn Hunt
“Country Road Group has an exciting runway for growth,” he said, highlighting the company’s popular brands, in-store and digital channels and product sourcing capabilities.
The business proved resilient in the lead-up to Christmas despite the rising cost-of-living pressures, with Country Road Group sales growing by 26.6 per cent across comparable stores in the six months to December. Shoppers flocked to the business in the lead-up to Christmas, with sales in the last six weeks of the half up by 8.5 per cent on the same time last year.
The growth comes as Australian Bureau of Statistics figures show that sales of clothing and personal accessories have stayed strong into the start of the 2023 calendar year, with turnover up by 6.5 per cent from December 2022. Australian shoppers forked out close to $3 billion for clothing last month.
Bagattini said the group was investing in refurbishing standalone Country Road stores, and was also working on attracting new customers by expanding where its products were sold.
“We’ve opened up opportunities in the wholesale channel, for Country Road and Witchery ... extending our product reach into more regional towns in Australia,” he said.
The group’s launch back into Myer stores this year will grow the number of locations that brands like Country Road and Witchery are found across the country. Myer confirmed earlier this year that it had secured the return of the brands back to its stores after a long hiatus in which David Jones was the exclusive department store retailer.
“The partnership with Myer, through their store network and online platform, provides an opportunity for our brands to showcase great products to our core customer,” Country Road Group chief executive Raju Vuppalapati said back in January.
Bagattini said Woolworths would also be investing in the digital aspects of the Country Road business, having recently launched a new app for the brands. The retailer will be focusing on growing the reach of the brands via its online channels and through bricks-and-mortar stores.
“Our Country Road Group brands also play an important role in our apparel offering here in South Africa,” he said on Wednesday.
While David Jones proved a headache for Woolworths Holdings after it bought the business in 2014, its ownership of Country Road Group has been more successful, and management had no intention of letting the brands go when it started a sale process for DJs last year.
Online sales have slowed for the business since the end of the COVID lockdowns, but still contributed to 26.1 per cent of sales in the six months to December 31.
Woolworths Holdings, which is not connected to the Australian listed supermarket operator Woolworths, will still not confirm the exact price tag of its sale of David Jones to Anchorage Capital last year. Those with knowledge of the deal have said it is around $100 million, not including the potential proceeds from a sale of the flagship store on Melbourne’s Bourke Street.
The sale is slated to be completed in late March.
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