David Jones set to end century-long presence of department stores in Hay Street Mall

For more than a century, a department store has been the anchor tenant on the eastern side of Hay Street Mall in Perth’s CBD. That will change by the end of the year, when David Jones’ flagship WA store shuts its doors for the last time after receivers this week announced it would be one of three across the metropolitan area to close as part of a nationwide restructure. For veteran WA marketing and retail analyst Barry Urquhart, it won’t be an easy task to find a replacement — and even if one is found, it likely won’t be another department store “now that there is a mindset that this is a poor site”. Before the 188-year-old David Jones occupied the shopfront on the mall, there was family-owned Aherns, which opened its doors in May 1922. The new department store — founded by Irish draper Thomas Ahern — had plenty of competition, with seven other similar stores catering for a Perth population of less than 100,000. There was the Cox Brothers-Economic Store on the corner of Hay and William streets, while Bon Marche sat opposite the Town Hall on Barrack Street. Foy and Gibson’s spanned between Hay Street and St Georges Terrace. “There’s always been an anchor component of department stores in the Hay Street Mall,” Mr Urquhart said. “It now no longer becomes a destination, it becomes a thoroughfare. “About 34¢ of the dollar is spent on impulse and spontaneity so when you’ve got people walking the Hay Street Mall, they make unintended purchases because they get exposed to merchandise, premises and temptation. “That’s the sort of thing that’s going to be missing.” In 1999, David Jones fast-tracked its return to WA after a 25-year absence by acquiring Aherns’ city store and suburban stores in Claremont, Booragoon, Karrinyup and Rockingham for nearly $30 million. By doing so, David Jones also eliminated one of its potential major competitors in the Perth market. By the time of its sale to David Jones in 1999, Aherns was the last family-owned department store chain in Australia. Aherns managing director Robyn Ahern in 1999 said while the decision was tough, a corporate restructuring was inevitable given the need for expansion. Mr Urquhart said Aherns determined there was little scope or capacity to grow. “Aherns never had momentum and critical mass. It was always a secondary department store to Myer,” he said. “I think the problem that you’ve got is that Aherns, and now David Jones, is not famous for anything. With David Jones on the ground floor on Hay Street, in their frontage, was cosmetics and perfumes. Now what department store doesn’t have that? “And then it was very cold — bright lighting, high ceilings, solid flooring. It wasn’t a theatrical, warm, embracing ambience.” The renovated city store, which almost doubled in size to about 21,000sqm, opened in October 2002. At the time, then David Jones chief executive Peter Wilkinson claimed the revamped store carved into its competitors’ market share. He described the upgrade as “one of the best investments we’ve ever made”. “We don’t ever break down store figures, but when we decided to double the size of the store we obviously believed we would double the size of our sales,” Mr Wilkinson said at the time. “Well, we’ll beat that very significantly.” Receivers FTI Consulting this week announced it would axe 19 of David Jones’ 38 stores in a bid to keep the upmarket retailer alive. New South Wales will bear the brunt of the closures, with seven stores to go including Macquarie Centre, Macarthur Square, Parramatta and Wollongong Central. Another three will close in Melbourne, including at Glen Waverley and Malvern Central. Perth is the only city to lose its flagship store. There are now talks the space could be divided into smaller stores. “It won’t be a single outlet, it won’t be a replacement department store,” Mr Urquhart said. “It is very unlikely that there will be any significant situations with Harvey Norman or JB Hi-Fi as has been mooted. I’m not saying it’s impossible, but it’s improbable. “The only opportunity they’ve got is to create precincts . . . where people go and they can get not just one product or buy from one business, but they go there for a suite of services.” Mr Urquhart said there was also a “mindset that this is a poor site”. “There’s just the stigma about that site and so there’s kind of the reluctance in business people,” he said. “We’re not in a widely expansive mode at this particular stage in business, there’s not a lot of startup businesses. Entrepreneurialism is cut back a little bit, so risk tolerance is very, very fatuous and very, very low at the moment.”

David Jones set to end century-long presence of department stores in Hay Street Mall

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