‘Economies of scale’: Retail experts revisit idea of Myer, DJs merger

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The idea of Australia’s major department store brands coming together under the same roof is back in favour | MsEmmaK

Speculation about a takeover of David Jones has emerged this week after the department store reported its full-year financial results.David Jones declined to comment to this masthead on whether it had fielded any offers, but Andrew Forrest’s Tattarang and private equity operator Anchorage Capital have been touted as potential buyers.

The uptick in investor interest in the sector raises the possibility that Australia’s department store market could be ripe for consolidation, with Myer and David Jones potentially owned by a single entity.“We absolutely think it [a merger of Myer and DJs] would make sense. There is a lot of real estate that could be consolidated,” portfolio manager at Wilson, Oscar Oberg, said.

Retail historian at Macquarie University, Dr Matthew Bailey, said any future buyer of David Jones would have to work out what edge department stores have over other bricks-and-mortar retailers, however. David Jones boss Scott Fyfe said on Tuesday that while there is no doubt the economic outlook is uncertain, the retailer is showing a post-COVID bounce back.“Interestingly, what our results across the last year or so have shown is that, outside of a lockdown environment, customers flock back to their retail purchases in a big way with steadily building footfall and consistently increasing online shopping traffic,” he said.

 

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MsEmmaK Do an investigation into pepper corn rents. Small businesses in malls pay exorbitant rents, turnover fees and promotional levies while some of the big boys pay sod all.

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