David Jones
The David Jones store in Elizabeth Street, Sydney hosts a number of high-end designer brands. Photo: Getty
  • 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.
  • For more stories, go to www.BusinessInsider.co.za.

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 

David Jones
The basement houses luxury homeware products. Source: David Jones

a food section

David Jones
David Jones Food, kitchenware & small appliances on the lower ground. Source: David Jones

four floors dedicated to women's and men's fashion, as well as a level dedicated to designer shoes

David Jones
Level 7, the designer shoes department. Source: David Jones

and a Disney-themed children's floor.

David Jones
Walt Disney themed level in the kids' department on Level 9 of the building. Source: David Jones