David Jones and Country Road in Review Amid Poor Sales

Marco Green
May 29, 2020

Aussies were blindsided by the announcement of Target closures and conversions.

"Sales and concession sales for the first nine weeks of H2 were up 0.5 per cent in local currency but declined by 35.8 per cent in the subsequent eight weeks to end-April".

Online sales in the second half of the financial year have doubled compared to the prior comparable period, the department store said, and since the easing of restrictions, there has been a "positive uplift" in footfall and "encouraging sales performance" across the store network.

The iconic department store brand will close as many as 48 outlets across Australia in the coming months and next few years, as retail suffers heavy losses.

However, sales are expected to pick up as CRG stores began their planned reopening on May 22.

UBS will look at restructuring borrowings and review the property holdings to find ways to pay off the almost $500 million in debt owed by David Jones and CRG, it said.

Woolworths (not to be confused with the Australia supermarket chain) says it has appointed investment bank UBS to review the capital structure and property portfolio of its Australian entities David Jones and the Country Road Group (CRG), which owns Country Road, Witchery, Trenery, Mimco, and Politix. Any proceeds generated as a result of our capital management initiatives will be applied to the repayment and cancellation of debt facilities.

A buyer has already been lined up for the Bourke Street Menswear building in Melbourne, while it is also expected that the group will look to sell the flagship stores on Sydney's Elizabeth Street and Melbourne's Bourke Street.

The sale price achieved is in line with expectations and final settlement is anticipated before the end of July 2020 following the fulfilment of customary conditions precedent the Company announced.

Scentre Group and CBUS have plans to redevelop the siteWoolworths Holding Limited said "Discussions with Australasian landlords are underway in relation to an accelerated restructure of the David Jones network of stores/locations and reduction in floor space".

The bright light on the horizon for the big retailers who recently cut back on CE and appliance brands is that, Woolworths the South African owners of the brand have won a waiver from its lenders on its debt covenants, the group has also loaned David Jones $75m as a short term loan until they restructure.

The company has suspended distributions to shareholders until such time as the situation arising from COVID-19 stabilises.

Other reports by Click Lancashire

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