Woolworths South Africa CEO, Ian Moir, has revealed the logic behind its acquisition of troubled department store chain, David Jones, back in November 2014. Speaking at the World Department Store Forum in Rome, Italy, last week, Moir said Woolworths had two key strategic reasons for the purchase. The first, he said, was it was a defensive move. With the influx of global fast fashion brands to Australia and the southern hemisphere in general, Woolworths was keen to create its own scale to become
the biggest and best in the southern hemisphere.
The second reason was more opportunistic. Woolworths believed the David Jones brand could be better run.
According to Moir, loyal customers had been let down and DJs had inspired very little engagement with its shoppers. The aim of the acquisition was to transform the business and put the customer back at the forefront.
DJs’ large customer database was also a deal sweetener, which Woolworths plans to leverage to drive customer relationships.
Woolworths SA also owns Country Road, Witchery, and Mimco in Australia.
Significant opportunity is open to DJs in the online sector.
At present, e-commerce makes up 1.8 per cent of sales for DJs, with 2 million unique visitors a month, spending an average of four minutes on the site. It has a conversion rate of 0.95 per cent.
In comparison, the Country Road Group’s Australia online sales total 10 per cent of its total, with 2.1 million unique visitors a month spending three minutes 55 seconds per visit and a conversion rate of 1.43 per cent.
This story first appeared in Inside Retail PREMIUM issue 2043. To subscribe, click here.
