New ‘Knifepoint’ David Jones store a move away from old strategy

By Patrick Avenell

SYDNEY, NSW: The post-McInnes David Jones era has made a decisive move today against one of the key strategies of the fallen CEO’s reign. Whereas McInnes was focused on planting David Jones department stores in high income, high socio-economic areas, new CEO Paul Zahra today announced that DJs will be opening a new marquee store in the Highpoint shopping centre.

This shopping centre, known colloquially as ‘Knifepoint’, is located in Melbourne’s western suburbs and, although still in the catchment area for some affluent suburbs, is more closely associated with lower social demographics. Store placements such as these were avoided by McInnes, who once famously taunted rivals Myer by highlighting the disparity in the two department stores’ target markets.

“There are some structural differences between David Jones and Myer and it’s worthwhile pointing out those differences,” said McInnes during his successful if scandalous time as DJs CEO. “All of our new stores are in medium to high income demographies and two-thirds of our competitor’s stores are in low income and regional demographies.”

With McInnes now gone, Zahra is changing this core element of DJs’ business plan. He said today this area represents a growth prospect and that consumers in this area are not currently being serviced, with the nearest store in the Melbourne CBD. By establishing a store at Highpoint, DJs will compete head to head with Myer, which already has a four-level presence at Highpoint.

“It is a market in which we are not currently represented – our closest store to Highpoint being our Bourke Street Mall flagship store, which is approximately 12 kilometres away and all our other David Jones stores are in the eastern and southern suburbs of Melbourne,” said Zahra.

“The Highpoint region is currently serviced by only one department store which means there is enormous potential for a new department store entrant such as David Jones.”

Zahra continued to say that this area’s catchment zone has an average household income of just under $67,000 per annum.

Construction is expected to start on this store next month. David Jones estimates that once fully operational, this store will generate sales of between $50 and 60 million every year.

The new Highpoint store is expected to open in the first quarter of 2013.

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