Inside the legendary Aus store that Woolies just sold, after spending billions on renovations
- Woolworths has sold its flagship David Jones in Sydney for R5.6 billion.
- The group spent years and billions of rands renovating the property, and the project was only completed earlier this year.
- But Woolworths is battling a debt burden of more than R11 billion, and needed the cash.
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After spending years and billions of rands on renovating its flagship David Jones store in Australia, Woolworths has decided to cut its losses.
It is selling the store to help tame its R17 billion debt burden, created by its disastrous foray into Australian retail.
Woolworths bought the David Jones chain in 2014 for more than R21 billion at the time. It has since been force to write off at least half of that amount as the Australian group continued to disappoint.
The company only recently completed a multi-billion rand project to renovate the huge Elizabeth Street store in Sydney, which now also includes concession shops, much like those in UK’s high-end department stores, Selfridges and Harrods.
But on Tuesday, it announced that it was selling the property for A$510 million (R5.6 billion) to Australian-based property manager and developer, Charter Hall, who will lease the space to Woolworths as part of a 20-year rent agreement
The transaction – which follows with another recent sale of a property in Australia – was welcomed by investors, with the Woolworths share price up more than 4% on the day.
Inside the legendary Elizabeth Street store
The 182-year-old David Jones group first opened the doors of its Elizabeth Street store in 1927. It is the oldest department store in the country. The store traded through the Second World War, and in 1954 was the location for a state banquet held in honour of the visiting Queen Elizabeth II. It also hosted Christian Dior’s first ever fashion show to be held outside of Paris.
Following the renovation, each floor now hosts a dedicated shopping category, including a basement-level level for homeware
a food section
four floors dedicated to women's and men's fashion, as well as a level dedicated to designer shoes
and a Disney-themed children's floor.