Solomon Lew Walks Away From Potential David Jones Takeover
Solomon Lew has held discussions with Woolworths Holdings to buy beleaguered department store David Jones, but walked away from the deal.
Lew was apparently looking to buy the chain for his private, family-owned investment company, rather than the publicly-traded Premier Investments, which he heads up.
With Premier owning close to 20 per cent of Myer, its very likely that Lew was simply taking the opportunity to look at the competitor’s books.
“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 for the Lew Private Group confirmed.
“The Private Group has investments spanning homewares, apparel and footwear and actively assesses acquisition opportunities as part of its ordinary business.”
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.
“We are not considering an exit from Australia,” a Woolworths Holdings spokeswoman said this month, when asked about the David Jones rumoured. This wasn’t however, a straight denial, as the South African company also owns Country Road Group, which owns retailers Country Road, Trenery, Witchery, Mimco and Politix.