This article is from the Australian Property Journal archive
PART of the David Jones store will make way for a new Kmart offering in Melbourne’s super-regional Highpoint Shopping Centre, as the major department store accelerates its plans to slash 20% of its floorspace.
Discount department chain Kmart is moving into the shopping centre at the expense of Wesfarmers stablemate Target. All Target staff members will be offered a position at the new Kmart store.
Wesfarmers has gone about cutting the number of Target stores, in some cases converting them outright to the better-performed Kmart, which it is expanding.
At Highpoint, Kmart will move into the bottom level of David Jones, which will cut its store from two floors to one and optimise its product mix. It is unknown what traders will take up the soon-to-be former Target space.
David Jones’ parent company, South Africa-based Woolworths Holdings had planned to slash 20% of its floor space through store closures and optimisations by 2026, but Woolworths Holdings CEO Roy Bagattini said in September this would be fast-tracked to a period of just two years.
Last year, David Jones sold the six storey building at 299 Bourke Street in Melbourne to Newmark Capital for $121 million, and will move the menswear offering from the building to the larger flagship store opposite, at 310 Bourke Street, which itself will be refurbished.
Major landlords are grappling with an existential crisis and mulling over the best way forward for their shopping centre assets. Landlords are needing to reinvigorate their shopping centre offerings with new tenancy mixes and experience-based features as they try and attract foot traffic in a post-COVID world that has become increasingly accustomed to online shopping, while many businesses have been lost or are facing a more difficult battle to stay afloat in the short-term because of the pandemic.
Earlier this year month, AMP Capital announced that David Jones’ main rival Myer had ceded space and 30 retailers have been moved or close down to make way for the first automall within an Australian shopping centre.
AMP Capital leased a chunk of space within the Indooroopilly Shopping Centre in Brisbane to national auto dealership Eagers Automotive, effectively bringing a car sales showroom and service centre inside the super-regional centre.
Myer has also been looking to give up space across department stores in recent years. In Melbourne, Myer gave up 6,600 sqm in the Emporium shopping centre that co-owners Vicinity Centres and GIC intended to convert to co-working space.
Swedish fast fashion house H&M has just confirmed it will be closing three stores in Australia this year.
