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· Posted on
February 21, 2024

David Jones has been picked up from the 'Clearance' rack by private equity investors for a measly $100m

Private equity investor Anchorage Capital Partners has acquired David Jones for just $100m.

What's the key learning?

  • Woolworths South Africa acquired David Jones for over $2.1b back in 2014, but now, Anchorage Capital Partners acquired the 184 year old department store for just $100m.
  • 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 business.
  • Carve-out refers to the business strategy where a parent company sells out of one of its business units.

👉 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.

What's the key learning?

💡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:

  • Expanding DJ's into food with David Jones Food Halls (which didn't work)
  • Expanding the department store across the whole southern hemisphere (which also didn’t work).

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.

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