David Jones to close Perth Hay St, Carousel, Garden City stores

Why it matters

WAtoday reported that the flagship Hay Street Mall building belongs to Singapore-based Starhill Global REIT, the same owner as the neighbouring mall. Scentre Group holds Carousel and Garden City through joint ventures with co-owners.

We reported on 6 November that Starhill had flagged the risk to its distributions from the retailer’s administration: see Starhill REIT warns David Jones administration may cut payout 10.6%. The new fact is that the Perth closures are now confirmed for after Christmas.

WAtoday quoted an industry insider, who did not speak publicly under their name, saying the Hay Street space is a very large tenancy and would most likely be broken into several stores rather than let to one tenant. The same insider said the owner would likely weigh the most viable option and was aware of plans for the site.

The numbers

WAtoday reported that David Jones has about 6000 employees and that the closures are expected to cost thousands of staff their jobs nationally. The outlet did not give a Perth-only job figure, so we do not state one.

In a statement reported by WAtoday, receivers from FTI Consulting described the move as a “difficult decision” to proceed with an “urgent restructure”.

What’s next

On the Hay Street building, WAtoday reported that Starhill Global REIT issued a statement to investors last Thursday saying it had been doing contingency planning for some time. The statement said that work includes pursuing replacement tenants, repositioning or repurposing the property to multiple tenancies, and redevelopment feasibility studies that weigh market demand, capital requirements and expected returns.

City of Perth mayor Bruce Reynolds told WAtoday that what fills the space is “ultimately a commercial decision”. He said his discussions with the owner indicated it is in the property for the long haul. He also said some empty spaces in the CBD, including St Martin’s Arcade, are earmarked for redevelopment, and predicted a rejuvenated Hay Street Mall.

WAtoday did not report plans for the Carousel or Garden City tenancies. Scentre Group chief executive Elliott Rusanow said its centres were 99.8 per cent occupied with strong demand for space. The receivers said there is no final closure date for the stores but they expect trading to cease by the end of the year.