Shock as David Jones to sell Bourke St menswear store
David Jones is set to shake up Melbourne’s central Bourke St shopping precinct, revealing plans to sell off the site of its flagship menswear store in a move that could reap more than $100 million as it gives its sister store across the mall a significant makeover.
The 181-year-old retailer says selling the site at 299 Bourke St will pave the way for it to create a cohesive single-store experience in the heart of Melbourne, with its premier trading site at 310 Bourke St to become an “elevated retail destination”.
David Jones says it will start on the refurbishment and optimisation of the remaining store in January 2021.
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The changes come as part of a strategy being implemented by David Jones’ owner, South Africa’s Woolworths Holdings, to sell off unwanted city stores and focus flagship outlets and repeats a strategy already used in Sydney.
The company sold its “men’s store” Market St property in Sydney to Westfield owner Scentre and Cbus Property for $360 million in 2016 and has since poured some of proceeds into a $200 million overhaul of its primary Elizabeth St property.
Several levels are already open in Sydney and it is due to complete in March 2020. But less disruption in expected in Melbourne as the Bourke Street flagship has already undergone some work.
Recent enhancements to the site include updates to the beauty and luxury accessories hall, updated lifts and escalators, and new Little Bourke Street airwalks, entrances and facade.
David Jones has been under pressure and in August Woolworths Holdings slashed its value by $437 million, declaring Australia’s retail sector was in recession. The move saw department store chain’s value cut back to just $965 million, far less than the $2.1 billion that Woolworths Holdings bought the prestigious retailer for in 2014.
Now, in a move that will see it sell off its last major non-core city retail holding, David Jones will list its current menswear store at 299 Bourke Street in coming months, seeking to capitalise on the exceptionally hot commercial property market.
Few other sites are available and developers are expected to dig deep as the property could sustain a mixed-use project including retail and office space, which is at a premium.
Meanwhile, the new-look store, which will also be completed in 2021, is to be specially curated with an emphasis on premium luxury and lifestyle brands. The existing store footprint will be optimised to increase floor space and enhance the in-store experience.
Woolworths Group chief executive Ian Moir says the sale of 299 Bourke St and development of an enhanced single-store offering is a significant milestone in the brand’s retail optimisation strategy.
“The sale of 299 Bourke Street will allow us to deliver a more integrated retail experience to customers in Melbourne’s CBD,” he says.
“A single-store flagship housing the best local and international brands in one world-class destination will create a more seamless and cohesive experience for our customers.”
He says the Elizabeth Street flagship in Sydney was nearing completion. “We look forward to commencing the sale process and creating a new future for David Jones Bourke Street,” he says.
The appointment of a commercial real estate agent to manage the sale of the site will be made in the coming weeks.
Funds from the sale will be applied in part to the refurbishment project, with the remainder applied to other areas of the business.
This article originally appeared on www.theaustralian.com.au/property.
