Woolworths confirms sale of Australian clothing chain David Jones

Woolworths has agreed to sell Australia’s oldest department store chain David Jones to Anchorage Capital Partners, ending an expensive misstep for the South Africa-based retailer.

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According to BusinessTech, the deal will remove about R17 billion of liabilities related to the David Jones store portfolio, with the final value of the deal to be determined by the end of March, when the transaction is expected to be completed, Woolworths said in a statement on Monday.

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Woolworths acquired the near 200-year-old David Jones chain in 2014 for around A$2.2 billion.

Woolworths did not immediately reveal the value of the deal with Anchorage Capital Partners.

However, local media in Australia and Bloomberg reported the deal to be worth around A$130 million (just over R1.5 billion).

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“The history here has been a painful one,” Chief Executive Officer Roy Bagattini said in a conference call.

“The transaction allows us to overnight improve our return on capital by several percentage points.”

Woolworths’ share price rose 1.7% early on Monday and has climbed 30% since Bagatinni’s appointment nearly three years ago.