David Jones will terminate a lease with Westfield in Melbourne in favour of opening a store in upmarket North Perth that is better aligned to David Jones core customers.
David Jones has successfully negotiated with Westfield Trust to terminate its lease at the proposed Fountain Gate shopping centre redevelopment in Melbourne. The Fountain Gate agreement was entered into by David Jones in 1996, but was later determined to be outside the David Jones target market in a 2003 Strategic Review, David Jones then commenced negotiations with Westfield to attempt to terminate or, if this was not possible, at least renegotiate the terms of the existing Fountain Gate agreement.
As part of the deal which has been signed by David Jones, the option to open a new department store at the Westfield Innaloo development in the attractive, northern corridor of Perth sealed the deal and was a very attractive option given David Jones’ renewed focus on upmarket shoppers after the 2003 strategic meeting.
The Westfield Innaloo option ensures David Jones’ dominant presence in northern Perth, which is one of Australia’s fastest growing and high value markets, and provides full flexibility for the company in this market, until there is more certainty about the development potential of other centres in this corridor,
which is subject to Western Australia’s planning laws.
David Jones CEO Paul Zahra said, “We are pleased to have terminated our Fountain Gate lease on acceptable commercial and strategic terms. We have known since our 2003 Strategic Review that the demography of the Fountain Gate centre is not aligned with our target customer and does not fit in with
our new store strategy, which is to open high value stores in high value locations.
“We are also pleased with the option to open a new store at Innaloo located in the high growth, high value northern corridor of Perth. This coupled with our proposed new store in Whitford (also in northern Perth) means David Jones will establish a dominant presence in one of the fastest growing, high value
markets in Australia,” Mr Zahra said.