David Jones and Country Road sales have stumbled amid the COVID-19 crisis, which has prompted Woolworths Holdings to review the retailers' nearly $500 million debt.
Woolworths Holding Group, the South African parent of the retailers has appointed UBS, an investment bank, to reduce its $464 million debt.
David Jones will be closing some of its 48 stores and sell property interests in an effort to reduce strain.
Sales at the department stores have dropped more than one third during the eight weeks leading up to the end of April – despite trading through the pandemic.
In April and May, sales fell 35.8 percent for David Jones. Similarly, Country Road sales have dipped 50.4 percent over the same period.
“UBS Australia has been appointed to support [a review of the capital structure of the Australasian entities] and will conduct a full review of options relating to the Australasian property portfolio,” said the company in a statement.
“Any proceeds generated as a result of our capital management initiatives will be applied to the repayment and cancellation of debt facilities.”
Despite the boom in online sales, it has not been enough to counterbalance the debt accumulated from the decline.
“We expect the challenging and fluid operating environment brought about by the pandemic, to continue for the foreseeable future,” said the company in an update.
“In these unprecedented times, the Board and management team will continue to act swiftly and decisively to protect the Group’s financial position.”
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