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David Jones Acquired by Anchorage Capital Partners

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By Published On: December 20, 20220 Comments

David Jones is back in Australian ownership following the announcement that the omnichannel retailer will be acquired by Anchorage Capital Partners.

David Jones announced Monday afternoon that its current owner Woolworths Holdings Limited has entered a binding agreement for Anchorage Capital Partners to acquire the operating business. The sale is a result of six months of engagement from Anchorage Capital Partners. Though the exact sum is undisclosed, according to Australian Financial Review, Anchorage Capital Partners paid between $120 million and $150 million for the company, Business News Australia reports a source close to the deal claim it could be worth around $250 million including an upfront cash consideration of $100 million and $150 million in dividends for the previous owners.
While the actual price is yet to be revealed, it is clear that the sale price is significantly lower than the $2.1 billion paid by South African brand Woolworths Holdings Limited in 2014. During the 8 year ownership period, Woolworths Holdings Limited has since made over $1 billion in writedowns and sold the rest of its property portfolio to repay debts amongst store closures due to covid.

Scott Fyfe, David Jones CEO since October 2020, will continue to lead the company with his management team fully backed by Anchorage Capital Partners. During its ownership under Woolworths Holding Limited, five different CEOs helmed the business through a turbulent period for the department store.

David Jones was founded in 1838. Over its nearly 185 years, David Jones became a household name in Australia and New Zealand with 43 stores and now two distribution centres across the countries. The company is now an omnichannel department store with a rapidly growing ecommerce focus.  “David Jones has a storied history, immense brand value and unparalleled assets―including an attractive retail footprint, a loyal customer base, and dedicated employees,” said a spokesperson for Anchorage Capital Partners. “The Anchorage team will work closely with CEO Scott Fyfe and the talented David Jones management team on the next phase of its transformation. Under this team’s stewardship, David Jones is now profitable, cash-generative, and self-funding, and we are confident in David Jones’ next chapter as the retailer of the future with a seamless omnichannel experience.”

Anchorage Capital Partners makes this purchase following several high profile retail deals. The  Australian private equity company has recently invested in Brand Collective and grew its sales from less than five percent of total sales to greater than 20 percent. Before that, the company briefly acquired Dick Smith during which time tripled its stake in the company.  “This transaction aligns with Anchorage’s investment strategy and its successful track record of executing complex carve-outs,” said the Anchorage Capital Partners spokesperson in the company’s statement. “We look forward to leveraging our deep industry expertise, hands-on approach with management, and continued investment to drive key initiatives to grow the business and deliver sustainable future performance.” 

CEO Scott Fyfe confirmed the company will continue to execute its Vision 2025+ strategy, which capitalises on its privileged market position and brand value to:
• know and grow the customer base;
• be an omnichannel curator of world-class brands;
• deliver a seamless service experience;
• and leverage the skill and experience of its talented employees.

“Together, we see many opportunities to optimise value and innovation in the David Jones business as we enter a new phase of growth,” said Fyfe. “David Jones has been through a significant transformation, driven by our Vision 2025+ strategy, and I look forward to working with the Anchorage team to further enhance the leadership position of David Jones in Australia as the nation’s leading omnichannel retailer and one of its most loved and long-standing brands.”

Anchorage Capital Partners will acquire the operating business of David Jones with the transaction expected to close by the end of March 2023, subject to customary closing conditions.

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About the Author: Rosalea Catterson

Rosalea is the Editor of Power Retail. With a keen interest in consumer behaviour and tech, she covers everything ecommerce and hosts the Power Retail Power Talks Podcast.

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