David Jones Limited plans more stores in Melbourne
29 Nov '07
3 min read
The sale proceeds will be reinvested in the lucrative Melbourne market by way of a redevelopment & refurbishment of David Jones' two flagship Melbourne Women's & Men's Bourke St CBD stores. The Home Store categories will be relocated to these sites as part of the redevelopment.
Melbourne is a key growth market for DJs given: - Department Store Sales in this market have grown by 60% in the period 1995 – 2007 & continue to be strong; - DJs Melbourne sales over the same period have tripled (from $120 mil in FY95 to $352 mil in FY07); and - Since 2001, DJs Bourke St store sales have increased by 60% (from $115 mil in FY01 to $182 mil in FY07).
The redevelopment does not require any debt funding - it will be fully funded by: - Net proceeds from the sale of 266 Little Bourke St ($42 million); and - The DRP which will remain in place for a further year (FY10) ($43 million from the DRP in FY09 & FY10).
The redevelopment will be EPS accretive in year 1 (FY10) & EBIT will be unaffected during the 18 month redevelopment, due to an $8 million disruption compensation facility.
The redevelopment will commence in May 2008 and is expected to be completed in time for Christmas trading in 2009. A staged development process will be implemented to minimise disruption for customers.
marketing@alchempro.com
