New owners of David Jones admit $2 billion purchase 'veered off course'

The CEO of the South African company that owns David Jones has told a US publication that the purchase of the Aussie retailer marked a moment the business had veered off course in its quest to become a southern hemisphere retail empire.

Roy Bagattini told Bloomberg that the $2 billion purchase of David Jones, which was done under the watch of his predecessor Ian Moir, has proved to be a difficult business challenge.

"It's increasingly difficult to create a so-called regional player with a level of impact and scale that can really materially shift your performance," he said.

"Businesses are increasingly required to be locally relevant."

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Moir had driven the David Jones acquisition, with the hope of creating an opportunity for WHL to compete with high-end fashion retailers in the southern hemisphere.

But they ran into a number of problems, not least the issue that WHL tended to sell goods under its own brand, while David Jones stocked mostly other brands.

Long leases on expensive stores forced discounts and value write-downs, while the COVID-19 pandemic took the same toll it has taken on many businesses.

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Bagattini said the pandemic had contributed to a shift to a more local focus for businesses.

"You can't be all things to everybody," Bagattini told Bloomberg.

But he would not confirm that David Jones, which WHL has downsized, would be up for sale, only that WHL was "considering all possible options".

And WHL will keep at least one toe in Australia with its Country Road Group.

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