SYDNEY–Australia’s David Jones department store chain is one step closer to opening its first international store.
At a meeting Friday, nearly all 200 shareholders of the 152 year-old single-site Wellington, New Zealand department store Kirkcaldie & Stains voted unanimously to proceed with a conditional agreement to sell the company’s brand name and assign its lease to the Woolworths South Africa-owned David Jones, for 400,000 Australian dollars cash or $292,000 at current exchange. David Jones will also have the option to acquire the fixed assets of the business for 500,000 New Zealand dollars or $331,000 within 25 working days.
Kirkcaldie & Stains will close late January 2016, with the site due to re-open as David Jones in mid 2016, after an extensive store refurbishment.
Kirkcaldie & Stains recorded a 6.5 million New Zealand dollar loss for the year ending August 31 2014, or $5.44 million for the period, caused by various writedowns, on sales of $31.3 million New Zealand dollars or $26.17 million, down 3.8 percent – its seventh consecutive year of trading losses.
A subsequent strategic review identified three options for the retailer – a three-to-five year turnaround plan with new investment, downsizing or a full divestment of the business.
The Wellington store will be the first international store in the 177-year history of David Jones, which was acquired by Woolworths Holdings Ltd in August 2014 for $2 billion.
In a trading update earlier this month, Woolworths reported that David Jones achieved its strongest sales growth in eight years under the new ownership, with sales for the year ending June 30 rising 6.4 per cent in Australian dollar terms, underpinned by same-store sales growth of 3.7 percent.
“This is an exciting venture for David Jones and we are proud to reinvigorate this historic retail space and maintain it as the home of New Zealand’s premium department store when we open in mid-2016,” said David Jones chief executive officer Ian Nairn. “We look forward to bringing our ‘Next Generation’ store concept to Wellington and offering New Zealanders an expanded assortment of Australian, international and private label brands. This, coupled with in-store theatre, exemplary service and the continued tradition of a doorman, will deliver a world class shopping experience.”