Private equity investor Anchorage Capital Partners has acquired David Jones for just $100m.
👉 Background: David Jones is the 184 year old department store that’s known for quote ‘the best and most exclusive goods’. Despite the best and exclusive things in-store, the business has seen a major turn over the past 8 years.
👉 What happened: Back in 2014, Woolworths South Africa acquired David Jones for over $2.1 billion. But now, private equity investor, Anchorage Capital Partners has acquired David Jones for just cents on the dollar (or $100m).
👉 What else: The deal excludes the assets, like Bourke St Store in Melbourne. And this is just another example of a private equity picking up a carved out business.
💡Carve-out refers to the business strategy where a parent company sells out of one of its business units. For Woolworths South Africa, they carved out David Jones because it just didn’t fit in their strategy anymore.
💡Carve-outs are often great investment options for the right buyers, such as private equity funds. These are generally still good businesses but don’t fit into the parent company’s value proposition.
💡For Woolworths South Africa, they picked up David Jones with the goal of:
So a private equity firm like Anchorage Capital will likely show David Jones some love, dress it up and sell it in a few years for an absolute monza.
Sign up for Flux and join 100,000 members of the Flux family