Woolies to spend up to R2.1bn on Sydney superstore
Woolworths on Monday outlined plans to spend up to R2.1 billion on a “world-class” 39,000 sq m department store on 11 levels for its Australian subsidiary David Jones.
The South African retail group said it had sold its Market Street property in Sydney to Australia’s Scentre Group for A$360 million (R3.8 billion) and would be using up to A$200 million (R2.1 billion) of the proceeds to develop the adjacent Elizabeth Street building to offer “the best of fashion and food available in the southern hemisphere”.
The group said a three year lease-back of the Market Street building would ensure limited disruption to David Jones’ customers. The redevelopment is expected to be completed in the second half of 2019.
In September last year Woolworths appointed John Dixon, who led the turnaround of Marks & Spencer’s £5bn food business, as chief executive officer of David Jones, the iconic Australian department store chain it bought in August of 2014.
Woolworths added that the David Jones head office, currently housed in the two Sydney buildings, would be relocated to Melbourne and consolidated in a new campus with the group’s other Australian subsidiary, Country Road Group.
The company said it expected synergies and productivity benefits of at least A$10 million per annum from 2019.