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· Posted on
February 21, 2024

David Jones says everything is fine...actually... and they're not for sale

DJs says rumours of a sale are fake news... but we'll be keeping an eye out.

What's the key learning?

  • David Jones hasn't been doing great since it was bought by Woolworths, a South African company with no relation to the Aussie version.
  • DJs has denied rumours of a sale, but this follows a trend of international companies facing troubles after expanding or investing heavily into Australia.

👉 Background: Back in 2014, David Jones was bought for $2.1 billion by a South African company named Woolworths.. But it has been underperforming pretty much since then.

👉 What happened: They've been hit with an e-commerce boom, failure to sell fresh produce and a once-in-a-century pandemic. So  it's no surprise that operating profits at DJs have more than halved in the last four years.

👉 What else: The rumour mill is picking up again that Woolworths is speaking to investment banks about a possible sale of David Jones...but they've denied it...for now.

🔔 What's the key learning?

💡 When international companies expand into a new market, they need to take into account the nuances of the new geography. There are cultural differences, customer differences and legal/regulatory barriers.

💡Woolworths SA isn’t the first international company that have expanded, or invested heavily, in Australia - and then failed. There's Topshop, Max Brenner and Ed Hardy.

💡 And then of course, Starbucks. After years of pain, Starbucks closed 61 Australian stores to the tune of a reported $143 million loss.

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