David Jones has continued its store consolidation process, announcing the termination of the Toombul Queensland store, with the lease to be taken up by Target in the Centro shopping centre.
Centro, the operator of the Toombul Queensland shopping centre has reached agreement with David Jones over an early termination of the retailer’s lease. David Jones will instead shift its focus to its larger and more profitable Chermside store in the Westfield centre (5 km away from Centro’s Toombul Centre), which opened in August 2007.
David Jones’ existing lease with Centro for the Toombul centre was due to expire on 17 October 2012, however Centro have agreed on an early exit in February 2011 some 20 months early. Discount department store Target will take up David Jones’ space within the Toombul centre.
David Jones CEO Paul Zahra said the decision to close the Toombul store is consistent with the company’s strategy to focus on high growth stores with high value customers.
“The profits that would have been generated from our Toombul store will be captured as we transfer David Jones customers to our Chermside store (which is only 5 km away). This can be achieved at a vastly reduced cost in comparison to remaining at the Toombul site. Our Chermside store generates
more than double the sales of our Toombul store and has the scope to grow further.
“Our decision to agree to an early termination of our Toombul lease is consistent with our strategy to not renew leases for stores which deliver marginal returns.” Mr Zahra said.
Last week David Jones announced the company will terminate a lease with Westfield in Melbourne in favour of opening a store in upmarket North Perth suburb Inaloo that is better aligned to David Jones core customers. Today’s Toombul store closure is consistent with David Jone’s long term strategy after the company’s 2003 Strategic Review, with the upmarket retailer focusing on upmarket locations and high value customers.
The Company confirmed its commitment to provide continued employment to all of the current Toombul staff within David Jones.
