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Woolworths Holdings Looks To Sell David Jones

Woolworths Holdings is looking to offload David Jones, after paying far too much for the department store chain in 2014, and struggling with billions in writedowns since.

The South African holding company (no relation to the Aussie supermarket chain) is speaking to banks in a bid to offload the 2.4 billion dollar albatross it has had hung around its neck for the past eight years.

David Jones has had five CEOs in the last six years, and ended three years of straight losses in 2021, largely thanks to a 70.4 million JobKeeper handout and the sale of key assets, including the Elizabeth St Sydney CBD building for $510 million, and the Bourke St building in the Melbourne CBD for $121 million.

The company also pulled out of its failed dual-branding exercise with BP service stations, closed the majority of its loss-making food halls, and trimmed floor space by 7 per cent.

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.

Woolworths Holdings is unlikely to get $2.4 billion for David Jones, despite foot traffic being up. No doubt the group will be happy to just be rid of it.

Woolworths stocks have risen 4.16 per cent in light of the news.

 



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