DJs to review store presence
The search is also on for new sites in neighbourhood strips across the country, of about 7000 square metres, based on the village format store in Malvern, Melbourne.
It is one of the most thorough reviews being planned by the department store chain in many years.
In the past, the leases were automatically rolled over, irrespective of the performance of the stores.
But in the next five years, leases for six stores will expire, and David Jones is expected to vacate and use the opportunity to take up smaller spaces in locations better suited to its prestige demographics.
Traditionally landlords start negotiating commercial leases at least a year out to ensure they can lease the site. But if the tenant is leaving, the owner needs notice to plan for any redevelopment so as to minimise any loss of rent.
Outgoing chief executive Paul Zahra said at the first-quarter results announcement last week that the present portfolio consisted of 38 stores, of which six leases, in "less robust demographies", were due to expire in the next five years, and another three stores were to open by 2016 "in attractive demographies".
Suburbs such as Mosman, and Toorak in Melbourne, would be targeted for smaller, village-style stores, if space of about 7000 square metres could be found.
The six leases that expire are at Birkenhead Point (September 2014); Harbour Town, Queensland (June 2015); Wollongong (October 2015); West Lakes, South Australia (December 2015); Glen Waverley, Victoria (April 2016); and Macarthur Square (April 2017).
"These lease expiries give us the opportunity to review our store portfolio in light of our broader omni channel retail strategy," Mr Zahra had said.
He said the focus for the property side of the business was to develop smaller, village formats where gross lettable area generated 85 per cent of sales (in a smaller space) than the present 75 per cent.
"In the 2010 financial year, about 73 per cent of our gross lettable area was 'selling space'. We have increased this to a current average of 76 per cent and are working towards improving this to 85 per cent of selling space in our new stores and 80 per cent in our refurbished stores."
Mr Zahra said the smaller format store was a concept David Jones would be rolling out further.
"Success at Malvern will be an important precursor to further openings," he said.
David Jones' property managers await an update on the proposal from City Tattersalls Club to redevelop the site in Pitt Street, opposite the David Jones store on the corner of Market Street.
One property developer said once the development approval had been given to the proposed 48-storey tower above the City Tattersalls Club, a buyer could make a case for buying the air rights above the department store in Market Street and build a large complex.
Frequently Asked Questions about this Article…
David Jones is conducting an extensive review of its property portfolio as leases are expiring and stores are being redeveloped into smaller formats. This review aims to align with their broader omni-channel retail strategy and focus on locations better suited to their prestige demographics.
David Jones is conducting an extensive review of its property portfolio as leases are expiring and stores are being redeveloped into smaller formats. This review aims to align with their broader omni-channel retail strategy and target locations better suited to their prestige demographics.
David Jones plans to develop smaller, village-style stores, similar to their successful Malvern store in Melbourne. These stores will have a gross lettable area that generates a higher percentage of sales in a smaller space.
David Jones plans to develop smaller, village-style stores, similar to their successful Malvern store in Melbourne. These new formats aim to increase the percentage of selling space and improve sales efficiency.
In the next five years, leases for six David Jones stores are set to expire. This provides an opportunity for the company to reassess and potentially relocate to more suitable locations.
With six leases expiring in the next five years, David Jones plans to vacate some locations and seek smaller spaces in more attractive demographics. This provides an opportunity to optimize their store portfolio and enhance their market presence.
The Malvern store in Melbourne serves as a model for David Jones' new village-style format. Its success is considered an important precursor to further openings of similar stores across the country.
The Malvern store serves as a model for David Jones' new village-style format. Its success is crucial as it will influence the rollout of similar stores in other locations.
David Jones is targeting suburbs like Mosman and Toorak for their new smaller, village-style stores, provided they can find suitable spaces of about 7,000 square meters.
David Jones is targeting suburbs like Mosman and Toorak for their new smaller, village-style stores, provided they can find suitable spaces of about 7,000 square meters.
The focus of David Jones' property strategy is to increase the percentage of selling space in their stores, aiming for 85% in new stores and 80% in refurbished ones, to enhance sales efficiency.
David Jones aims to increase the percentage of gross lettable area dedicated to selling space. They plan to achieve 85% selling space in new stores and 80% in refurbished stores, up from the current average of 76%.
David Jones plans to use the expiration of leases as an opportunity to vacate less robust locations and move to areas that align better with their target demographics, thereby optimizing their store portfolio.
David Jones' property managers are awaiting updates on the City Tattersalls Club's proposal to redevelop the site opposite their Market Street store. This redevelopment could influence future property decisions and opportunities for David Jones.
There is a proposal from the City Tattersalls Club to redevelop a site opposite the David Jones store on Market Street. This includes a potential 48-storey tower, which could impact future property decisions for David Jones.
David Jones' strategy to focus on smaller, more efficient store formats aligns with current retail trends of optimizing space and enhancing customer experience. This approach is part of their broader omni-channel retail strategy to better serve their target demographics.
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