David Jones poised for recovery despite costly missteps, says top investor |domp
Credit:The repeated writedowns on its initial investment have prompted speculation Woolworths may look to dump the department store chain.
Online sales are also planned to become a major contributor to the group, with the company planning for online to be 20 per cent of total sales by 2025. Mr Ivan said the plan to reduce the company's significant debt was a solid strategy and preferable to Woolworths either selling the chain entirely or injecting additional capital into the ailing business.
The fund manager said if Woolworths' plans for David Jones proved successful, the company could again become a valuable asset in its portfolio, though it is currently seen as next to worthless by investors. "Despite department stores being under threat globally, we believe that DJ’s strategic initiatives appear sound [...] and should enable DJs to compete more effectively against online and specialist retailers," he said. "The investment in transformative projects and current strategy of right-sizing the DJ store footprint and continued investment in online is sound, and sets the business up well for the future.
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