Troubled David Jones weighs on investors
Investors are concerned that the group is pouring money into its failing Australian retail division
Multinational retailer Woolworths’s continued investment in troubled child David Jones is weighing on investors as the company fails to deliver a return on investment. In the past two years, the stock has been the worst performer among its peers, declining by about 23% — while Truworths was up 14.96%, TFG rose 70% and Mr Price Group gained 67.85%. Investors are questioning whether further capital investment is justified. Peter Takaendesa, a portfolio manager at Mergence Investment Managers, said: "It’s difficult when you are writing off the value of an asset to put more money into it, so it’s very difficult to justify it." In 2017, Woolworths spent A$56m (about R511m) to fix David Jones, while its other brands, like Country Road, received a capital injection of A$11m (about R100m) and Woolworths R619,000. Takaendesa said that while Woolworths admitted that ploughing money into its Australian business hadn’t been a success, continued investments into its private label and the roll-ou...
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