David Jones’ South African owner Woolworths has appointed a number of Australian advisers to oversee any potential offers for the department store giant.
This comes after Solomon Lew bought more shares in Myer, bringing his majority stake to almost 23 per cent.
According to the AFR, David Jones has again tapped Allens partner Craig Henderson, who oversaw the 2020 sales of flagship stores in Elizabeth Street, Sydney, and Bourke Street in Melbourne. Goldman Sachs is also believed to have been engaged for any potential sale.
Solomon Lew (below) held discussions with Woolworths Holdings regarding the purchase of David Jones, but walked away from the deal.
David Jones denied the reports at the time, but a spokesperson for Lew Private Group confirmed them shortly after.
“We can confirm that the Lew Private Group engaged in early stage, preliminary discussions with Woolworths South Africa, but those discussions have now ended,” a spokeswoman said at the time.
“The Private Group has investments spanning homewares, apparel and footwear and actively assesses acquisition opportunities as part of its ordinary business.”
In 2013, Myer proposed a $3 billion share-based “merger of equals” with David Jones. At the time, such a deal made sense for both. A lot has changed since.
David Jones has had five CEOs in the last six years, and endured three years of straight losses, which only ended in 2021 thanks to a 70.4 million JobKeeper handout.
It embarked upon a mis-aligned dual-branding exercise with BP service stations, shut the majority of its loss-making food halls, and slashed overall floor space by 7 per cent.
The company also sold the flagship Sydney CBD Elizabeth St building for $510 million, and the Bourke St building in the Melbourne CBD for $121 million.
Despite these cost-cutting measures, David Jones’ adjusted operating profit crashed 45 per cent over the last six months of 2021, to just $31 million.
The retailer posted a 9.2 per cent fall in sales, with lockdowns putting its bricks-and-mortar stores out of action for three months.
Myer, on the other hand, reported last week that it is on track to deliver the best yearly results since 2017.
