NZ Herald
  • Home
  • Latest news
  • Herald NOW
  • Video
  • New Zealand
  • Sport
  • World
  • Business
  • Entertainment
  • Podcasts
  • Quizzes
  • Opinion
  • Lifestyle
  • Travel
  • Viva
  • Weather

Subscriptions

  • Herald Premium
  • Viva Premium
  • The Listener
  • BusinessDesk

Sections

  • Latest news
  • New Zealand
    • All New Zealand
    • Crime
    • Politics
    • Education
    • Open Justice
    • Scam Update
  • Herald NOW
  • On The Up
  • World
    • All World
    • Australia
    • Asia
    • UK
    • United States
    • Middle East
    • Europe
    • Pacific
  • Business
    • All Business
    • MarketsSharesCurrencyCommoditiesStock TakesCrypto
    • Markets with Madison
    • Media Insider
    • Business analysis
    • Personal financeKiwiSaverInterest ratesTaxInvestment
    • EconomyInflationGDPOfficial cash rateEmployment
    • Small business
    • Business reportsMood of the BoardroomProject AucklandSustainable business and financeCapital markets reportAgribusiness reportInfrastructure reportDynamic business
    • Deloitte Top 200 Awards
    • CompaniesAged CareAgribusinessAirlinesBanking and financeConstructionEnergyFreight and logisticsHealthcareManufacturingMedia and MarketingRetailTelecommunicationsTourism
  • Opinion
    • All Opinion
    • Analysis
    • Editorials
    • Business analysis
    • Premium opinion
    • Letters to the editor
  • Politics
  • Sport
    • All Sport
    • OlympicsParalympics
    • RugbySuper RugbyNPCAll BlacksBlack FernsRugby sevensSchool rugby
    • CricketBlack CapsWhite Ferns
    • Racing
    • NetballSilver Ferns
    • LeagueWarriorsNRL
    • FootballWellington PhoenixAuckland FCAll WhitesFootball FernsEnglish Premier League
    • GolfNZ Open
    • MotorsportFormula 1
    • Boxing
    • UFC
    • BasketballNBABreakersTall BlacksTall Ferns
    • Tennis
    • Cycling
    • Athletics
    • SailingAmerica's CupSailGP
    • Rowing
  • Lifestyle
    • All Lifestyle
    • Viva - Food, fashion & beauty
    • Society Insider
    • Royals
    • Sex & relationships
    • Food & drinkRecipesRecipe collectionsRestaurant reviewsRestaurant bookings
    • Health & wellbeing
    • Fashion & beauty
    • Pets & animals
    • The Selection - Shop the trendsShop fashionShop beautyShop entertainmentShop giftsShop home & living
    • Milford's Investing Place
  • Entertainment
    • All Entertainment
    • TV
    • MoviesMovie reviews
    • MusicMusic reviews
    • BooksBook reviews
    • Culture
    • ReviewsBook reviewsMovie reviewsMusic reviewsRestaurant reviews
  • Travel
    • All Travel
    • News
    • New ZealandNorthlandAucklandWellingtonCanterburyOtago / QueenstownNelson-TasmanBest NZ beaches
    • International travelAustraliaPacific IslandsEuropeUKUSAAfricaAsia
    • Rail holidays
    • Cruise holidays
    • Ski holidays
    • Luxury travel
    • Adventure travel
  • Kāhu Māori news
  • Environment
    • All Environment
    • Our Green Future
  • Talanoa Pacific news
  • Property
    • All Property
    • Property Insider
    • Interest rates tracker
    • Residential property listings
    • Commercial property listings
  • Health
  • Technology
    • All Technology
    • AI
    • Social media
  • Rural
    • All Rural
    • Dairy farming
    • Sheep & beef farming
    • Horticulture
    • Animal health
    • Rural business
    • Rural life
    • Rural technology
    • Opinion
    • Audio & podcasts
  • Weather forecasts
    • All Weather forecasts
    • Kaitaia
    • Whangārei
    • Dargaville
    • Auckland
    • Thames
    • Tauranga
    • Hamilton
    • Whakatāne
    • Rotorua
    • Tokoroa
    • Te Kuiti
    • Taumaranui
    • Taupō
    • Gisborne
    • New Plymouth
    • Napier
    • Hastings
    • Dannevirke
    • Whanganui
    • Palmerston North
    • Levin
    • Paraparaumu
    • Masterton
    • Wellington
    • Motueka
    • Nelson
    • Blenheim
    • Westport
    • Reefton
    • Kaikōura
    • Greymouth
    • Hokitika
    • Christchurch
    • Ashburton
    • Timaru
    • Wānaka
    • Oamaru
    • Queenstown
    • Dunedin
    • Gore
    • Invercargill
  • Meet the journalists
  • Promotions & competitions
  • OneRoof property listings
  • Driven car news

Puzzles & Quizzes

  • Puzzles
    • All Puzzles
    • Sudoku
    • Code Cracker
    • Crosswords
    • Cryptic crossword
    • Wordsearch
  • Quizzes
    • All Quizzes
    • Morning quiz
    • Afternoon quiz
    • Sports quiz

Regions

  • Northland
    • All Northland
    • Far North
    • Kaitaia
    • Kerikeri
    • Kaikohe
    • Bay of Islands
    • Whangarei
    • Dargaville
    • Kaipara
    • Mangawhai
  • Auckland
  • Waikato
    • All Waikato
    • Hamilton
    • Coromandel & Hauraki
    • Matamata & Piako
    • Cambridge
    • Te Awamutu
    • Tokoroa & South Waikato
    • Taupō & Tūrangi
  • Bay of Plenty
    • All Bay of Plenty
    • Katikati
    • Tauranga
    • Mount Maunganui
    • Pāpāmoa
    • Te Puke
    • Whakatāne
  • Rotorua
  • Hawke's Bay
    • All Hawke's Bay
    • Napier
    • Hastings
    • Havelock North
    • Central Hawke's Bay
    • Wairoa
  • Taranaki
    • All Taranaki
    • Stratford
    • New Plymouth
    • Hāwera
  • Manawatū - Whanganui
    • All Manawatū - Whanganui
    • Whanganui
    • Palmerston North
    • Manawatū
    • Tararua
    • Horowhenua
  • Wellington
    • All Wellington
    • Kapiti
    • Wairarapa
    • Upper Hutt
    • Lower Hutt
  • Nelson & Tasman
    • All Nelson & Tasman
    • Motueka
    • Nelson
    • Tasman
  • Marlborough
  • West Coast
  • Canterbury
    • All Canterbury
    • Kaikōura
    • Christchurch
    • Ashburton
    • Timaru
  • Otago
    • All Otago
    • Oamaru
    • Dunedin
    • Balclutha
    • Alexandra
    • Queenstown
    • Wanaka
  • Southland
    • All Southland
    • Invercargill
    • Gore
    • Stewart Island
  • Gisborne

Media

  • Video
    • All Video
    • NZ news video
    • Herald NOW
    • Business news video
    • Politics news video
    • Sport video
    • World news video
    • Lifestyle video
    • Entertainment video
    • Travel video
    • Markets with Madison
    • Kea Kids news
  • Podcasts
    • All Podcasts
    • The Front Page
    • On the Tiles
    • Ask me Anything
    • The Little Things
  • Cartoons
  • Photo galleries
  • Today's Paper - E-editions
  • Photo sales
  • Classifieds

NZME Network

  • Advertise with NZME
  • OneRoof
  • Driven Car Guide
  • BusinessDesk
  • Newstalk ZB
  • Sunlive
  • ZM
  • The Hits
  • Coast
  • Radio Hauraki
  • The Alternative Commentary Collective
  • Gold
  • Flava
  • iHeart Radio
  • Hokonui
  • Radio Wanaka
  • iHeartCountry New Zealand
  • Restaurant Hub
  • NZME Events

SubscribeSign In
Advertisement
Advertise with NZME.
Home / Business

David Jones flags possible store closures

news.com.au
22 Sep, 2020 09:16 PM7 mins to read

Subscribe to listen

Access to Herald Premium articles require a Premium subscription. Subscribe now to listen.
Already a subscriber?  Sign in here

Listening to articles is free for open-access content—explore other articles or learn more about text-to-speech.
‌
Save

    Share this article

The impact of Covid-19 has exacerbated retail struggles. Photo / File

The impact of Covid-19 has exacerbated retail struggles. Photo / File

Up to 10 David Jones branches could be on the chopping block as the struggles faced by department stores are exacerbated by the ravages of COVID-19.

The company hasn't confirmed which stores could be axed but retail watchers have said regional branches, those close to another David Jones as well as its newer format stores could be having the ruler run over them. But with the pandemic cutting a swath through spending, all bets are off.

"I don't think many store locations are 'safe' right now," said Dr Jason Pallant, a marketing lecturer at Swinburne University.

READ MORE:
• David Jones opens first Auckland store, along with second Westfield Newmarket site
• Upmarket retailer David Jones set to open its Auckland Newmarket store in November
• Covid 19 coronavirus: David Jones dispels rumours it's closing NZ stores for good
• David Jones upbeat on sales

David Jones has confirmed it is planning on cutting 20 per cent of its floor space "including closing stores where this makes sense". It told news.com.au no closures were "imminent". Even if a store closed, the company said jobs would not be lost.

Advertisement
Advertise with NZME.
Advertisement
Advertise with NZME.

The Herald is awaiting a response from David Jones on whether any Kiwi stores are affected by the moves.

David Jones opened its first of two local stores in Auckland in November 2019.

Last week, David Jones' owner, South Africa's Woolworths Holdings (no relation to Australia's Woolworths), said the Melbourne based department store has slumped from a profit of $37 million in 2019 to a $33 million loss in 2020, a good chunk of that due to the pandemic. Online sales have doubled since the pandemic and now account for 14 per cent of sales.

Advertisement
Advertise with NZME.

Talking to the Sydney Morning Herald last week, Woolworths Holdings' Chief Executive Officer Roy Bagattini said David Jones was "overstored" and needed to shed a few.

Shoppers queue outside David Jones ahead of its Auckland opening. Photo / Supplied
Shoppers queue outside David Jones ahead of its Auckland opening. Photo / Supplied

"There's no doubt we have too many stores for what I think our business purpose is in Australia.

"It is overstored (sic) … I would expect to see a level of reduction coming through."

FIRST STORE FLAGGED TO SHUT

The firm had flagged a reduction in store numbers by 2025 but those plans could now be accelerated.

David Jones currently has 47 locations around Australia and New Zealand. A 20 per cent reduction in footprint would be around 10 stores. But fewer stores may close if some of that reduced footprint can be achieved by slimming down existing stores. David Jones in Marion, Adelaide; The Glen, Melbourne; and Carindale, Brisbane have recently been cut down to size.

"David Jones will continue to optimise our store network and formats over time and this will take in a variety of options including right-sizing our existing stores, re-purposing floor space … and in some instances closing stores where this makes sense," a company spokesman said.

The first store that it's known will shut is one its two branches on Bourke St in Melbourne's CBD. Referred to as the "men's store," David Jones sold the smaller Bourke St store in July for $121 million and will move menswear and its food hall over the road into its larger premises. It will lease back the men's store for a time.

The company has last announced it is undertaking "comprehensive review" of its David Jones Food business. This includes its famous food halls as well as its first stand-alone David Jones Food store in South Yarra, close to Melbourne's CBD. That has raised speculation that it will be an easy branch to banish.

In contrast, BP David Jones petrol stations – which sell a selection of ritzy ready meals, biscuits, pasta and more alongside the usual fuel and confectionary – are doing a roaring trade. There are already around 12 open in Sydney and Melbourne with an aim for 30 by year's end.

Advertisement
Advertise with NZME.

BRANCHES AT RISK

QUT Marketing Professor Gary Mortimer told news.com.au forecasting which stores might fall by the wayside was an "educated guess". But there were likely to be a number of variables in deciding whether to shutter stores including how difficult it was to wriggle out of leases; if a store has been recently refurbished and whether foot traffic is likely to be sustained.

"Regional stores are more exposed to closure than CBD stores … so stores located in holiday and tourism zones, where visitation tends to ebb and flow, may be less desirable to maintain. These include stores in Mandurah (south of Perth) or Wollongong."

But, Prof Mortimer said the relatively new Sunshine Coast store might be a keeper because of the wealthier shoppers around Coolum and Noosa.

David Jones could cut one of its two Gold Coast stores that are close to one another, he said, with Robina just 6 km from the more recently refurbished Pacific Fair branch.

David Jones' store in Toowong, in inner Brisbane, has other branches just 4kms either side of it.

Advertisement
Advertise with NZME.

"Experimental smaller format stores like Barangaroo, may be on the list too as their small format James St store in Brisbane closed earlier this year."

Long lease agreements make it difficult for retailers to exit even some underperforming sites.

"Stores with only a few years left on a lease may be at the top if the list for closure," said Prof Mortimer.

"But ultimately, David Jones may simply cut their losses, and payout remaining leases, ultimately saving other costs associated with running the store."

"NO STORE IS SAFE"

Swinburne's Dr Pallant said the pre-COVID logic had been that CBD stores were better placed than their regional and suburban counterparts due to high spending city workers and tourists. But COVID had turned that assumption on its head.

Advertisement
Advertise with NZME.

"With the shift to work-from-home due to the pandemic there is now a real consideration of whether large stores in CBD or major shopping centres will be sustainable.

"These locations attract high rental fees so depending on how big the shift away from CBD work is, I wouldn't be surprised to see some brands re-look at their major locations," he said.

Earlier this month, arch-rival Myer said its sales slump in CBD stores was more than three times that in the suburbs.

Nonetheless, David Jones has said its Sydney CBD store is doing remarkably well considering the chaos caused by the pandemic. After a $220 million makeover it opened in the middle of the national lockdown but now, the firm said, its sales are higher than last year despite fewer CBD workers and no tourists.

Dr Pallant said the reality was there would be question marks over many David Jones branches.

"Overall I don't think many store locations are 'safe' right now, as some of the long term impacts of the pandemic and associated lockdowns are only just beginning."

Advertisement
Advertise with NZME.

A David Jones spokesman said the aim was to align its offer with the "changed needs and preferences" of its shoppers.

"We are working methodically and constructively with all our landlords, suppliers and other stakeholders to approach our store space in different ways that increase productivity, ensure relevance and enhance experience.

"This includes further investment in our stores and the development of new offerings such as our Carindale beauty offering in Brisbane," he said.

"Simultaneously, we are investing in our omnichannel and online offering so that our customers have a seamless, elevated experience however they choose to shop with us."

- News.com.au

Save

    Share this article

Latest from Business

Premium
Retail

'Give it a second chance': Ruby's recycled clothing venture takes off

06 Jul 03:00 AM
Premium
Opinion

Opinion: What to do if you have been left out of a parent's will

06 Jul 12:00 AM
New Zealand

26-year-old beats seven finalists to win Young Farmer of the Year

05 Jul 11:41 PM

Audi offers a sporty spin on city driving with the A3 Sportback and S3 Sportback

sponsored
Advertisement
Advertise with NZME.

Latest from Business

Premium
'Give it a second chance': Ruby's recycled clothing venture takes off

'Give it a second chance': Ruby's recycled clothing venture takes off

06 Jul 03:00 AM

Miller-Sharma aiming for 25% of revenue from non-new clothing by 2030.

Premium
Opinion: What to do if you have been left out of a parent's will

Opinion: What to do if you have been left out of a parent's will

06 Jul 12:00 AM
26-year-old beats seven finalists to win Young Farmer of the Year

26-year-old beats seven finalists to win Young Farmer of the Year

05 Jul 11:41 PM
Premium
Trump’s finances were shaky. Then he began to capitalise on his comeback

Trump’s finances were shaky. Then he began to capitalise on his comeback

05 Jul 08:00 PM
Gold demand soars amid global turmoil
sponsored

Gold demand soars amid global turmoil

NZ Herald
  • About NZ Herald
  • Meet the journalists
  • Newsletters
  • Classifieds
  • Help & support
  • Contact us
  • House rules
  • Privacy Policy
  • Terms of use
  • Competition terms & conditions
  • Our use of AI
Subscriber Services
  • NZ Herald e-editions
  • Daily puzzles & quizzes
  • Manage your digital subscription
  • Manage your print subscription
  • Subscribe to the NZ Herald newspaper
  • Subscribe to Herald Premium
  • Gift a subscription
  • Subscriber FAQs
  • Subscription terms & conditions
  • Promotions and subscriber benefits
NZME Network
  • The New Zealand Herald
  • The Northland Age
  • The Northern Advocate
  • Waikato Herald
  • Bay of Plenty Times
  • Rotorua Daily Post
  • Hawke's Bay Today
  • Whanganui Chronicle
  • Viva
  • NZ Listener
  • Newstalk ZB
  • BusinessDesk
  • OneRoof
  • Driven Car Guide
  • iHeart Radio
  • Restaurant Hub
NZME
  • About NZME
  • NZME careers
  • Advertise with NZME
  • Digital self-service advertising
  • Book your classified ad
  • Photo sales
  • NZME Events
  • © Copyright 2025 NZME Publishing Limited
TOP