Woolworths reveals R7bn David Jones setback
The impairment equates to a tenth of the retailer's market capitalisation, while a shareholder says it has not come a surprise
Woolworths said on Wednesday it had impaired the value of Australian department store chain David Jones by nearly R7bn, or about a 10th of the South African retailer’s total market capitalisation. Woolworths announced a noncash impairment charge for David Jones of A$712.5m (R6.9bn) after the JSE’s close, which reflected "the cyclical downturn and structural changes" affecting Australia’s retail sector. The group also conceded to "poor or delayed execution" on some key initiatives and said it would continue to invest in the business, which it bought for R23.3bn in 2014. Analysts said that having written down nearly a third of that amount, Woolworths clearly overpaid for the business. Just One Lap founder Simon Brown — a now "grumpy" Woolworths shareholder — said the impairment was "terrifying but not a surprise". "They had warned of a write-down but that write-down looks quite chunky to me. I hadn’t expected quite so much." If you are already a subscriber, please click on the followi...
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