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Sale of David Jones to private equity firm reportedly in final stages

Private equity firm Anchorage Capital Partners is reportedly in the final stages of acquiring David Jones from Woolworths Holdings, the South African retail giant that bought the department store chain for A$2.1 billion in 2014. 

The Australian Financial Review reported on Wednesday that Woolworths Holdings’ deal with Anchorage Capital was imminent and estimated to be between $120 million and $130 million, a fraction of what the company paid for David Jones eight years ago. 

Multiple reports suggest the deal will be done by Christmas. 

Inside Retail contacted Anchorage Capital Partners about the reports, but they declined to comment. David Jones had not responded to Inside Retail’s request at the time of writing. 

Speculation about the sale of David Jones has increased in recent months, following reports in April that its parent company had been meeting with banks. 

It comes after a tough few years for the department store, which was impacted by forced store closures during the Covid-19 lockdowns, and a failed foray into food halls, which were shuttered after a strategic review in 2020. 

Scott Fyfe, the former CEO of Country Road Group, which is also owned by Woolworths Holdings, took over as CEO of David Jones in 2020. 

Since then, he has overseen the reinvigoration of the department store, including the refurbishment of its flagship stores in Sydney and Melbourne, and the exploration of new trends, such as fashion rental and resale. 

In 2021, the retailer reportedly turned a profit for the first time since 2018, thanks in part to a number of costly impairments coming to an end and the Australian government’s JobKeeper wage subsidies. 

In October, Woolworths Holdings’ CEO Roy Baggatini wrote in the company’s annual report that David Jones was “debt-free, self-funding, and has a clear roadmap to improving profitability”. 

As such, he wrote that Woolworths Holdings was now in a “favourable position to explore all future options in respect of this business, and how best to further unlock value for the group and our shareholders.”

According to the Australian Financial Review, Fyfe will remain CEO of David Jones after the sale is complete.

Further reading: David Jones’ turnaround strategy buds as conditions normalise.

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