David Jones' performance over the past decade has been underwhelming... but now it's turning a corner because its sales have jumped.
👉 Background: David Jones is the iconic department store founded way back in 1838. In April 2014, Woolworths South Africa (not related to Woolies here) acquired David Jones for over $2 billion.
👉 What happened: DJ's performance over the past decade has been as underwhelming as the recent Bachie and Bachelorettes seasons. But it seems like DJ’s is turning a corner.. its sales have jumped 55% since July.
👉 What else: Despite the recent uptick in sales, DJ’s is still up for sale because it seems like Woolworths' strategic acquisition of David Jones just hasn’t paid off.
💡A strategic acquisition is when one company purchases another company with the hope that they can more profitable together. In other words, the sum is greater than the parts.
💡These companies can consolidate parts of the business and reduce expenses. And on top of that, they can share know-how.
💡But since the acquisition of DJs, Woolworths has acknowledged that things haven't gone to plan.
So while this strategic acquisition appeared good in theory, it’s clear now that these businesses weren’t as aligned as once thought.
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