Industry insiders have revealed there are plans afoot for the flagship David Jones building on Perth’s Hay Street Mall to be divided into smaller stores.
It comes after the retailer told staff and suppliers on Wednesday it would close 19 stores nationally after the peak Christmas trading period, including stores at Perth’s Hay Street Mall, and in Westfield’s Booragoon (Garden City) and Carousel shopping centres.
However, the Claremont and Karrinyup stores will remain. The closures are expected to prompt job losses for thousands of staff from David Jones’ current roster of around 6000 employees.
David Jones on Hay St is owned by Singapore company Starhill Global REIT, which also owns the adjoining mall, while Carousel and Garden City are both co-owned by joint ventures through Scentre Group.
An industry insider who could not speak publicly told this masthead the retailer’s decision to close this early was a shock, but they knew it was coming at some point.
“David Jones has been very transparent, and I know every owner has been working on a plan for the last two to three years,” the insider said.
“But, I think to come just before Christmas was definitely a surprise. They didn’t think it was going to be November … they thought maybe March next year.
“But the owners will have lots of plans, they will just work out which one to execute.”
Regarding the Hay Street Mall location, the insider said they knew of “exciting plans” for the space, but the owner would likely be considering the most viable option.
“It’s a very large tenancy. It will most likely be broken down, and there will be a multiplicity of (stores), not just one,” they said.
City of Perth mayor Bruce Reynolds said what would fill the soon-to-be vacant space was “ultimately a commercial decision”.
“The discussions I’ve had with the owner is that they’re in there for the long haul,” he said.
“As a city, we roll out sponsorships and grants to activate business in the CBD, and we are always engaging with businesses to do more.
“Some of the empty spaces are earmarked for redevelopment, including St Martin’s Arcade, so you’ll see a rejuvenated Hay Street Mall sooner rather than later.”
Last Thursday, Starhill Global REITT issued a statement to investors regarding the David Jones collapse, saying the company had been undertaking contingency planning “for some time”.
“This includes pursuing replacement tenancy opportunities as well as repositioning or
repurposing the property to multi-tenancies which has gained positive traction,” the statement said.
“These ongoing efforts include redevelopment feasibility studies, taking into account market demand, capital requirements, and expected returns which are aimed at preserving and enhancing long-term value and returns for unitholders.”
Thousands of staff from the retailer’s roster of about 6000 employees are set to be axed as part of the move.
In a statement, the receivers from FTI Consulting said it had made a “difficult decision” to proceed with an “urgent restructure” in line with the plan put forward by Anchorage before David Jones collapsed.
“The receivers have commenced an immediate consultation process for all staff associated with 19 stores that have been identified for closure,” FTI said in a statement.
“For the immediate term, these stores will continue trading, and while there is no final date for the closures, we anticipate they will cease trading by the end of the year.”
The receivers acknowledged the restructure would have a “material impact” on staff and said it was committed to treating all employees with fairness and respect.
“Whilst the impacts are highly regrettable, the receivers believe the steps are unavoidable if David Jones is to continue as a viable business and these measures will help give David Jones the best chance for a sustainable future.”
Gift cards can continue to be used, although new ones are no longer available for purchase. Gift cardholders have been redirected to register their claim in an online form.
Starhill Global REIT and Scentre Group, which owns the Booragoon (Garden City) and Carousel shopping centres, have been contacted for comment.
with Jessica Yun and Colin Kruger.
Do you know more? Contact Carla Hildebrandt.
Carla Hildebrandt is a journalist with WAtoday. She previously worked on ABC’s Four Corners and as a court reporter at The Daily Telegraph in Sydney. For secure contact: carlahildebrandt@proton.me.Connect via email.From our partners
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