By Keri Algar
SYDNEY, NSW: In a release to the ASX this morning, David Jones has announced it will prematurely terminate a lease in Queensland’s Toombul Centre to “focus its efforts” on the larger and more profitable Chermside store, only 5 kilometres down the road.
The decision comes 11 days after the high end retailer successfully negotiated the end of its Fountain Gate lease with Westfield, signalling a lack of big spenders in the area as motive.
The Company does not anticipate any adverse effects in terms of costs to the Company and expects the Chermside store, which opened in 2007, to take on Toombul’s customers, according to David Jones’ CEO, Paul Zahra.
“The profits that would have been generated from our Toombul store will be captured as we transfer David Jones customers to our Chermside store,” said Zahra.
“Our Chermside store generates more than double the sales of our Toombul store and has the scope to grow further.”
“Our decision to agree to an early termination of our Toombul lease is consistent with our strategy to not renew leases for stores which deliver marginal returns.”
The Toombul lease was due to expire on 17 October 2012, but David Jones will now exit the store 20 months early, in February 2011.
The Toombul Centre space will be taken over by discount department store Target.