Thursday, 01 August 2019 18:30

Woolworths bought David Jones in 2014 with aim of creating a Southern Hemisphere retail giant and diversifying beyond a sluggish trading environment at home.

By then they told its investors that for a price at the time equivalent to R21.4 billion, it would "create a leading southern hemisphere retailer" and "become one of the top 10 global department store operators" by buying iconic Australian brand David Jones.

Today the South African company said it had written down the value of David Jones because of "economic headwinds and the accelerating structural changes affecting the Australian retail sector as well as the performance of the business, which has fallen short of expectations".

At current exchange rates that means Woolworths has now recorded on its books a loss of a little under R12 billion or well over half its initial huge investment.