# DJS - David Jones



## markrmau (24 February 2005)

Commsec gives DJS P/E=12.52   Div Yield=6%, 100% franked.

Don't think the market is over reacting a tad?


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## markrmau (3 March 2005)

*Re: DJS*

Retail sales in department stores are up, and there is a possibility the next interest rate won't happen (though read Ross Gittens in todays SMH for alternative view).

So I just bought 10000 DJS.

(And my partner can go nuts with the DJS discount card it looks like).


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## DTM (3 March 2005)

*Re: DJS*

Nice buy Mark, looks like you've bought at the bottom.  I can only see the price going up on this one, especially heading into dividends time.


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## markrmau (10 May 2005)

*Re: DJS*

Any idea why retailers jumped today? DJS and MRL.

Perhaps expected tax cuts? Worth getting back into DJS?

(I wouldn't touch MRL though)


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## markrmau (18 May 2005)

*Re: DJS*

DJS looks like it could be a buy. SP has been pummeled by the warm winter / retail slowdown, but looks like the good management practice will still allow them to maintain earnings and dividend growth.

Please do own research. I am going to wait for late trading to confirm my view.


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## Nicks (14 February 2006)

DJS - great stock, good management, excellent dividends, good operating business, most successful major department store. Less competition now with Myers going down the gurgler. More strategic alliances with suppliers. Getting into real assets - Sydney and Melb buying the store real estate. Real assets is always good, and if they are doing it they must be cashed up.
Thumbs up for DJS.


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## crackaton (14 February 2006)

I agree


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## Nicks (15 February 2006)

So does the market, up 5% today.

Regardless still a good cash cow, brings in great dividends and will hover around $2.50, maybe more as they are growing by buying their real estate - excellent strategy to improve growth and EPS.


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## rozella (15 February 2006)

Dividend is announced mid to late March


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## scotth_73 (5 October 2006)

Nicks said:
			
		

> DJS - great stock, good management, excellent dividends, good operating business, most successful major department store. Less competition now with Myers going down the gurgler. More strategic alliances with suppliers. Getting into real assets - Sydney and Melb buying the store real estate. Real assets is always good, and if they are doing it they must be cashed up.
> Thumbs up for DJS.




given the above quote, this is a company worth investing in.  it's an absolute "model" on the cat-walk as was shown off by the company in its spring collection.  currrent market valuations suggest DJS "models" are size 16-18 and whilst cuddly for dividends renders a lack of capital gains at current levels.


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## swingstar (18 October 2006)

I'm quite bullish on DJS. I think we may be in a for a small correction soon (wave 4), but I think it has a long way up to go yet. 

I have counted it down to the daily, but this is the larger picture on the weekly.


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## Dr Doom (22 December 2006)

As Maverick said to Goose - 'he's going vertical Mav'. So too has DJS with blow-off past $4 today. Weakening retail conditions are yet to be factored in apparently.


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## swingstar (23 December 2006)

I think we're in wave iii of 5 of (3), so still bullish in the short-term. Have projected around $4.30 for this wave iii.


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## Dr Doom (23 December 2006)

As far as technical indicators go, this is the perfect parabola setup. Wait and see I guess.

(And I think Goose actually said to Maverick   )


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## swingstar (23 December 2006)

Here is my EW count on the daily... The wave 4 is the "small correction" I anticipated in my last post. The grey line is $4.30, where a number of projection techniques using Fib coincide.


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## Dr Doom (5 January 2007)

This one is getting interesting now, what I call a sharp binary, ie it could go either way with a bang. The upside may be limited by fundamentals, but could be subject to buy-out/takeover fever. The downside is that none of that happens and retail will continue to weaken. Interesting chart still


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## swingstar (5 January 2007)

I exited my long position earlier today. It got close enough to my projection (.02) and retreated back the other day, so I think we're into wave iv. After this, if it is indeed wave iv, we should see a further move up and then another, longer correction.


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## Dr Doom (10 January 2007)

Some big numbers starting to appear on both sides of the bid/ask ledger. The stock hasn't moved either side of $4.06 for a few days now as buyers & sellers are locked into a tug of war. I don't hold much faith in this one taking off again, especially if the buyers capitulate if the market generally continues it's indecision of the last 3 days.


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## Dr Doom (11 January 2007)

Not a good sign here, down 5c when the index, XDJ is up a massive 45 points.


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## Lucstar (7 March 2007)

The recent retraction in SP may stand as an opportunity to stock up. This business has great fundamentals. They're building up their non-current assets (by buying the Melb and Syd stores), which is a great investment especially in times of rent being through the roof. Also, they're opeining up new stores in many new locations (burwood, doncaster, etc), which will give them more market share. David Jones has some of the best management team i've ever seen, who is constantly improving the way they do business (cost cutting). Infact, i know this for a fact becuase i, myself, am employed by David Jones and i have seen them exploit us very well (lol, jking). Furthermore, they're really pulling in the cash recently. I've never seen our stores so busy in recent times. We've been working our arses off. So i believe the retail sector is still far from economic slowdown. FUNDAMENTALS ARE BEUTIFUL!!!! I'm definately looking for an opportunity to stock up.

Love to hear from others' opinion


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## Dutchy3 (28 April 2007)

Not my preferred time frame and I also note the parabolic weekly chart ... all the same have been a buyer the last two days of this week .... quick and dirty


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## Uncle Festivus (28 April 2007)

Dutchy3 said:


> Not my preferred time frame and I also note the parabolic weekly chart ... all the same have been a buyer the last two days of this week .... quick and dirty




Nothing like a bit of retail therapy Dutchy 
The twins have done well lately (DJS & HVN). What price target are you looking for or will you bail out at the first sign of weekness? CFD's I presume?


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## Dutchy3 (28 April 2007)

Hi Unc

Second sign of weakness and yep CFD's ... the weekys a concern though even when I try not to pick market tops this one has had a great run ... might only get 10 - 20 % but nicely geared


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## Uncle Festivus (14 May 2007)

The next cab off the takeover rank perhaps? What's going on here? Topped out at $5.40 so far today, big volume.


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## Dutchy3 (14 May 2007)

Really .... a take over?  Goodie ... Might have to revise my expectations for this one , 10 - 20% has already been achieved ...


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## BuzzMoo (10 January 2008)

Hi all, first post, long time lurker - very new to trading but i thought I'd open a thread because I couldn't find any discussion on David Jones, and need a sounding board for developing my analysis! My very first trade was with this stock and I made $90 or so, and I was going to keep riding the wave. But these economic worries have muted the Santa Claus rally i was hoping for, and the January Effect surely is horribly distorted this year on account of the troubles. I haven't jumped back in because I don't feel confident in predicting the news, and things could get pretty dramatic.

Still, I understand DJS to have profited well during Dec and will likley post increased profits.

That said, the stock is currently trading at $5, found resistance at 5.5 on NYE and has dropped through the 5.06 support it found mid Dec. Looking at my charts i see the next support at 4.8. 

On bad economic news I can see it falling, if the news lightens up it looks like it would be happy to run back up to previous highs as it looks like it took some heavy selling today. My limited technical analysis skills don't paint a satisfactory picture... I'm one of those guys who reads the news first and then looks at the charts.

Any thoughts/experiences appreciated!


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## imaginator (26 March 2008)

What happened to the stock price? If u look at the chart it stinks. Is subprime the problem here?

Today they posted higher profit. But will it break that big downtrend on their charts?


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## roland (17 June 2008)

Been collecting a few DJS around this level since reading the report from Aegis. Aegis have put a buy on the stock with an expected low of around $3.20 - obviously we are there already 

Dividend return is now better than most of the banks and 100% franked. 12 month target is around $5.00

Pity the volume seems a little low, but looks to be quite a stable stock.


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## roland (23 June 2008)

It's a bit lonely here in DJS land 

Closed at $2.93 today, or 3.62% down for the day. The lowest it's been since August 2006. I picked up some more today at $2.95 bring my average down to a little over $3.20.

Dividend yield at this level is nearing 8% fully franked.

Annoucements today show that Ausbil Dexia Ltd have just become a substantial holder with picking up 24.5M shares.

I am personally quite confident that DJS at these levels is a very good buy. Indicative growth for FY08-09 is 5%-10% PAT.

Just my opinion and not a recomendation - as always 


P.S. Still waiting for my DJ Shareholders card to get 2% off everything in their stores as well - that'll make the missus happy


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## kenny (7 July 2008)

Hi Roland,

Hopefully it's not as quiet in the DJ's stores themselves. 

I'm curious on what strategy are you considering to average down on DJS?

The stock has recently come up on my radar as a possible turnaround soon BUT the retail sector and especially the discretionary spending part of it is not facing rosy times ahead.

Aspect Huntley is getting interested sub $3.00.

Do you think the attractive historical yield is sustainable with depressed sales figures?

regards,

Kenny


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## roland (7 July 2008)

Hi kenny,

I got some more at $2.82, so my average is now $3.16. My plan with DJS was always to go in light and average down until I have collected the quantity I was after and then just sit on it.

As for the dividend yield ... well, I suppose one would like to think it will hold. I don't believe that DJS are under any financial stress. Their customers tend to be in the higher income bracket of the market, so they are probably under less stress than some of the heavy discounters - like Clive Peters for example.


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## roland (17 July 2008)

2 x very nice days running for DJS, have sold off 2 x parcels at a good 8% gain. Still have 3 x parcels and will start collecting again if it goes below $3.00

DJS is shaping up to be quite an interesting short term trading stock. Not a huge volume, but quite volatile.


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## roland (21 July 2008)

another great day for David Jones - up 5.33% to $3.36, a little higher through the course of the day.

I am all in profit now and trying to decide whether to sell and take the profit, or to hold for dividends.

I suspect that I am close to being the only holder of DJS on ASF


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## roland (22 July 2008)

a bit of slippage today, down nearly 3% for no other reason than the usual clone "follow the market". I suspect a little panic profit taking since we are on a 6 week SP high.


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## roland (24 July 2008)

Sold! (well except for 1K which I bought at $3.48), at $3.48. Now I am waiting for the guts to drop out of it again so I can get them back. I now have "sellers remorse"


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## roland (28 July 2008)

Buying opportunity for me with the drop to $3.30, only 1,000 units - brings my average down to $3.40

Aegis have lowered their 12 month target to $3.57 and have the following comentary:



> After reporting a strong Christmas trading period, DJS has maintained 2H08 guidance of 8%-13%, which we see as attainable. The company has undertaken to deliver 5%-10% NPAT growth through the cycle and committed to maintaining a dividend payout ratio of not less than 85%. The slowing of consumer spending is starting to impact DJS' like-for-like sales growth rates, however, management has taken steps to offset lower sales through cost reduction strategies.




So, maybe a slightly weaker Dividend payout - but should retain enough value to make the div worthwhile.


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## roland (9 October 2008)

Thought I would spread my misery around with all my holdings. Maybe my losses will brighten up someone else.

DJS -19.72%


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## roland (7 May 2009)

roland said:


> Thought I would spread my misery around with all my holdings. Maybe my losses will brighten up someone else.
> 
> DJS -19.72%




Well, I held - and traded where applicable, collected some dividends on the way and now up 20.35% (not including dividend returns)

Quite an amazing turnaround.

I must say that I am quite impressed with the management team at David Jones, they are very quick with adjustments to inventory. Focusing on exclusive product lines takes away some of the profit eating practices of maintaining price competiveness with other retailers cutting margins to maintain market share.

Unlike the over optimistic forecasts of some other companies, DJS projections tend to be cautious and if anything a little pessimistic - a recipe that can easily delight the market when they appear to over achieve.


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## Julia (7 May 2009)

That's an interesting "disproving" of the maxim "never hold a falling stock", Roland.  Did you have a level at which you would have sold, or did you have such faith in DJS that you were confident to hold for a rebound?


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## skc (7 May 2009)

I have said it before and I will say it again..

*NEVER *under-estimate the power of Miranda Kerr (and Megan Gale).

Well done Roland. But Julia asked the question I wanted to ask as well. Was it lucky, insight or other?


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## roland (7 May 2009)

Well, I certainly couldn't claim any insight, but have traded DJS for a few years now and felt pretty confident with their strategies.

On the other hand, I just got a little pig headed with not wanting to lose any more and decided to keep hold of stocks that payed dividends at or above bank rates.

So I kept Westpac, David Jones, Babcock and Brown Wind (now Infinigen) - all of which, with dividends, are in profit.

As for how far I would have held...... tough question, I would have held until the dividends were suspended.

I think


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## ricee007 (8 May 2009)

Ahhg,

Just thought I would check out DJS...

Turns out dividends were just paid 2 days ago, and in less than a week the stock has gone up from $3.01 to $3.64 (and paid the 11c dividend [ I undestand record date wasn't 2 days ago]).

Hmm, not quite comfortable buying in at this level (which more accuratly reflects the value of DJs, comparedd to $3).


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## roland (8 May 2009)

ricee007 said:


> Ahhg,
> 
> Just thought I would check out DJS...
> 
> ...




Yes, I would agree, my average is $3.02 - I won't be adding unless the share price drops below $2.90


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## ricee007 (11 June 2009)

roland said:


> Yes, I would agree, my average is $3.02 - I won't be adding unless the share price drops below $2.90



Poor us

Last price: $4.12.

The result of how confident Australian consumers are (100.1 IIRC) has seemingly really helped DJs, up 22c yesterday.

Cheers,
Rhys


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## roland (11 June 2009)

DJS's still powering ahead. Media reporting consumer confidence helps 

Sold my highest packet at $4.30 just now, leaves me with 3,000 at an average of $2.73.

Can't help but feeling a pull back is due. Looking at the chart - seems like $3.60 could be a nice pyramid purchase.


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## Wysiwyg (23 September 2009)

Big DJ at all time highs again now. Took 4 years before, done in 6 months now. Go bulls go, go bulls go, yayyyyy.


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## bloomy88 (22 April 2010)

Looking at DJS, it appears to be much better value than MYR at the moment.

P/E of 13 compared to 17
D/E of 15% compared to 57%
Dividend yeilds are similar
DJS predicting profit growth of 5-10%, MYR predicting growth as 0-2%

DJS have had a big turn around of processes in recent years and is currently near all time high levels

Any other thoughts?


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## skc (18 June 2010)

CEO left in disgrace this morning on inappropriate behaviour towards a female staff member.

http://www.smh.com.au/business/disgraced-david-jones-ceo-mcinnes-exits-with-2m-20100618-ykjp.html

I hope that female staff member was not Miranda Kerr...


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## Julia (18 June 2010)

It doesn't matter who the staff member is, it's unbelievably stupid behaviour from someone in the CEO's position.


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## Bigukraine (18 June 2010)

Julia said:


> It doesn't matter who the staff member is, it's unbelievably stupid behaviour from someone in the CEO's position.




absolute power corrupt's absolutely.... some of these guy's think their too smart and have no respect for the general population that are not of their station.


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## nulla nulla (18 June 2010)

Julia said:


> It doesn't matter who the staff member is, it's unbelievably stupid behaviour from someone in the CEO's position.






Bigukraine said:


> absolute power corrupt's absolutely.... some of these guy's think their too smart and have no respect for the general population that are not of their station.




I understand that he left with a $2,000,000 payout. Maybe it was contrived? How much does the victom get?


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## Julia (18 June 2010)

nulla nulla said:


> I understand that he left with a $2,000,000 payout. Maybe it was contrived? How much does the victom get?




I doubt very much it was contrived, nulla.  He actually lost entitlement to a lot more than that.  This is from "The Australian":


> David Jones chairman Bob Savage slashed Mr McInnes's payout by at least $4m, with the former chief getting his statutory pay of $450,000 plus a "mutually agreed" $1.5m.
> 
> According to the terms of his contract, he could have picked up $3.6m in termination pay plus a bonus of $2.5m along with other long term, incentives.
> 
> Mr Savage defended the company's decision to give Mr McInnes a "settlement payment" of $1.5m and said David Jones did not have a culture of harassment.




Radio report on the ABC this evening said there was no report of the young woman concerned being 'paid off', that Mr McInnes had forestalled this by taking the initiative to resign.
What a hell of a price to pay for a silly little ego trip or whatever it was.
Total idjit.


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## nulla nulla (19 June 2010)

A very young boy being bathed by his mother looked down at his tool kit and asked "Mummy is that my brains?". His mother answered "No dear, not yet".


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## Lucstar (29 July 2010)

After a period of dormant activity, the technicals of this stock shows a sign of outbreak. Should be a good run to come. Definately a stock to keep an eye on. 


P.S. I want to attach a chart to show the outbreak graphically. But i dont know how to attach image file. My apologies there.


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## eunza (2 August 2010)

I agree with Lucstar on DJS right now - SP looking positive - clear and established Uptrend happening:

RSCD T/A:  Daily Chart attached

1.  Price trend - Obvious price trending upwards 

2.  RMACD : Bullish and confirmed MA Heading lower (bullish) Note the 3 arrows where the Pink shading has pushed lower on 3 consecutive occasions.  Also on AVG the trend continues to be supported by at least the Blue line.  There are 3 levels of support:
Green line - Optimum support - bounce off below this line again (may) start another breakout upwards on the SP (buy)
Blue line - Will confirm the bullish trend (hold/buy)
Red line - breaking of this support will indicate the trend has failed and will most likely retrace upwards.  Although the SP will not always drop instantly the further up this goes the higher the chances.
As a guide the long arrow on the MA describes the overall direction.

3.  This is an example of a very consistent uptrend on the RSI - note the high level of support on the green line.  Although a break of the blue and red lines wouldn't automatically indicate a sell out - This would need to be considered against the RMACD

I currently hold.







Lucstar said:


> After a period of dormant activity, the technicals of this stock shows a sign of outbreak. Should be a good run to come. Definately a stock to keep an eye on.
> 
> 
> P.S. I want to attach a chart to show the outbreak graphically. But i dont know how to attach image file. My apologies there.


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## skc (2 August 2010)

Court action now being persued... a cool $37m is being asked for.

http://www.smh.com.au/business/davi...se-publicist-sues-for-37m-20100802-112iw.html



> In a landmark claim lodged today in the Federal Court, Ms Fraser-Kirk is seeking 5 per cent of the profits made by David Jones and 5 per cent of Mr McInnes's salary while he worked for the company.




I wonder how the lawyers argue that DJ shareholders should pay 5% of profit to the claim? Doesn't such case require demonstration of damages?


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## eunza (2 August 2010)

Thanks for the heads up skc

Also saw it mentioned on General forum - I've decided to get out of DJS for now - Although the court action will most likely fail there will be some knee jerk selling anyway.  So to avoid any headaches and so I don't have to watch the Fundamentals too closely i've back out.





skc said:


> Court action now being persued... a cool $37m is being asked for.
> 
> 
> 
> I wonder how the lawyers argue that DJ shareholders should pay 5% of profit to the claim? Doesn't such case require demonstration of damages?


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## Lucstar (8 August 2010)

This whole sexual harrassment thing has been totally blown out of proportion. 

Mark McInnes only "ATTEMPTED" to approach the silly blonde. She rejected his advances and the story ends there. I mean come on. This happens every night at night clubs. Mark McInnes was a great CEO and it was already over-done when he handed resignation for the so-called "sexual harrassment". And
now she wants $37 million in compensation. What an absolute joke! What damages did she incurr? NOTHING! There's absolutely no substance for a court case. She will not get a dime. If theres anything she'll achieve, its two seconds worth of publicity. Simply wasting the court's time, let alone further destroying the reputation of a good man running a good company.   

I hold in the belief that good fundamentals prevail long term.


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## Lucstar (16 August 2010)

New short term high reached today ($4.88) dispite the ongoing sexual harrassment lawsuit


So far so good

I hold


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## Lucstar (18 August 2010)

Good reporting result today. Also good comments on outlook. 

The psychological price barrier of $5 has been well smashed today.

If this momentum continues to play out, "we're in the killzone pal" (Gordon Gekko)


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## Lucstar (2 September 2010)

Stock price up 3.41% today to close at $5.15

Nice healthy profits rolling in now!


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## Tyler Durden (25 December 2011)

> MYER and David Jones will continue to suffer from lacklustre sales in 2012, as nervous consumers limit their spending during the critical trading period after Christmas, say analysts.
> Capping a horror stretch for the retail industry, analysts at Goldman Sachs yesterday cut their earnings forecasts for the nation's two biggest department stores, and predicted weak confidence would limit consumer spending.
> Despite retailers' attempts to convince consumers to spend, analysts Phillip Kimber and Gabriel Wilson-Otto downgraded their 2012 profit forecasts for Myer by 14 per cent and David Jones by 9 per cent.
> Spending on non-essential goods would remain weak in the crucial months of December and January because people lacked confidence and falling house and share prices would weigh on consumers, the analysts said.
> ...




http://m.smh.com.au/business/downgrades-for-myer-djs-20111223-1p8mf.html

Even Christmas won't help


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## danbradster (25 December 2011)

Tyler Durden said:


> Myer yesterday brought forward the start date of its ''Boxing Day'' sale from December 26 to Christmas Eve.




Lol at their _Boxing_ Day sale.  Changing consumers' expectations...what will consumers expect from them next year?  Discounts before Christmas, I think...


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## notting (25 December 2011)

I was invited to go have lunch with some friends at Chadstone, Australia’s premier shopping hub which has em all.
As I got into the car I put on my grumpy old man hat and started cursing the stupidity of going to Chadi on the anticipated biggest shopping day of the year.
As I drove I noticed that I had left at a miraculous moment for the traffic was much better than it usually is on a Saturday.
Then When I got to Chadi I was amazed at how many car parks there were.  It's usually a bit of a battle.
Then when I got a great table at the most popular and trendy eatery I figured that everyone has already done their Christmas shopping and used the first Saturday to start there holidays!!
Retail figures are going to be shocking unless they had double the normal amount the few days before!!


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## McLovin (30 June 2012)

Well that's been an interesting day for DJS. I saw the headline this morning and thought damn, I missed the boat. Then I read the announcement and thought it all seemed a little bit strange. How many entities are unincorporated and have a few billion to splash around have no public record? Not many I imagine!

It looks as though someone is playing with DJS.


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## skyQuake (30 June 2012)

Apparently a hoax!


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## burglar (1 July 2012)

skyQuake said:


> Apparently a hoax!






> EBPE’s proposal is said by EBPE to be A$1,650 million for a 100 percent acquisition of David Jones
> and is described in the letter received by the Company as being based upon “…$850m of equity
> provided by the EBPE led consortium, $450m of lending provided by a syndicate of banks and
> investment institutions and $450m in residual equity for the existing David Jones Limited
> shareholders, a portion of this residual equity shall be underwritten”.




It doesn't add up! Can I have the $100m difference?


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## notting (1 July 2012)

skyQuake said:


> Apparently a hoax!




Apparently a short.


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## skc (2 July 2012)

Lol. Bid withdrawn. It's probably a joke on the merger arbitrage traders as much as anything else.

The release says something like "Upon further due diligence of our own bank account, we didn't have a spare $1.65B."

Now let's go back to shoting JBH and MYR.


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## Gringotts Bank (2 July 2012)

What's to stop someone taking a huge long position on BHP one day, making a "takeover bid", selling into the crowd then retracting the bid?  You'd just have to get your second cousin's best friend from Siberia to place the trades for you.


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## skc (2 July 2012)

Gringotts Bank said:


> What's to stop someone taking a huge long position on BHP one day, making a "takeover bid", selling into the crowd then retracting the bid?  You'd just have to get your second cousin's best friend from Siberia to place the trades for you.




My second cousin from Siberia won't be returning the winnings, unfortunately.


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## Sergio (18 April 2013)

any thought about DJS?
is it gonna run up to $3 like MYR?

DJS is running good so far, even with very few buyer like today, price still go up a bit.
seems seller not willing to lower down the price.. try to fish before but no one take my bait..


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## Tyler Durden (30 January 2014)

Media reports today that Myer and DJS could merge.

DJS released an announcement saying it is not in any current such discussions, although on 28/10/13 Myer did approach them with an offer.

Guesses on effect of SP?


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## skc (30 January 2014)

Tyler Durden said:


> Media reports today that Myer and DJS could merge.
> 
> DJS released an announcement saying it is not in any current such discussions, although on 28/10/13 Myer did approach them with an offer.
> 
> Guesses on effect of SP?




I am so glad that I didn't put on that long MYR short DJS trade. That will get blown out of the water tomorrow.


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## VSntchr (31 January 2014)

skc said:


> I am so glad that I didn't put on that long MYR short DJS trade. That will get blown out of the water tomorrow.




Got out of my DJS short on tuesday  (for a profit too  )


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## Porper (31 January 2014)

VSntchr said:


> Got out of my DJS short on tuesday  (for a profit too  )




Excellent timing. Do you use a timing method V.S or was it the patterns that made you take profit?

When and why did you short...same question as to why you closed the position.


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## VSntchr (31 January 2014)

Porper said:


> Excellent timing. Do you use a timing method V.S or was it the patterns that made you take profit?
> 
> When and why did you short...same question as to why you closed the position.




Sorry, should have been more clear. I was commenting in reply to SKC's post about avoiding the pair trade involving long MYR and short DJS. 
I was in a pair involving long PMV short DJS.
Entry and exit was as per normal pairs trading (fundamental correlation and statistical divergence).


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## VSntchr (9 April 2014)

That was unexpected!

Myer has been blindsighted by a South African "Woolworths" putting in a bid (which has been recommended by DJS) for $4 cash per share.


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## pinkboy (9 April 2014)

I just got the flu when it whooshed past my very eyes!


pinkboy


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## skc (9 April 2014)

VSntchr said:


> That was unexpected!
> 
> Myer has been blindsighted by a South African "Woolworths" putting in a bid (which has been recommended by DJS) for $4 cash per share.




DJS has been a takeover target since Miranda Kerr was 16 years old... I just can't really believe that Woolworths SA is willing to pay $4 for it. 

Myer's pitch was mergers of equal. Now DJS is valued at $2B while Myer @ $1.3B... Definitely not equal anymore.

With all those talkes about MYR taking over DJS, I was actually thinking, may be DJS should turn the table and acquire MYR instead. Thankfully I didn't take that trade.


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## McLovin (9 April 2014)

I hope they double checked that the email came from the official Woolworths SA mailbox.


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## skc (9 April 2014)

McLovin said:


> I hope they double checked that the email came from the official Woolworths SA mailbox.




Lol. I think they got more than just an email this time.

I might send an email for a higher bid and see if they bite...


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## McLovin (10 April 2014)

skc said:


> DJS has been a takeover target since Miranda Kerr was 16 years old... I just can't really believe that Woolworths SA is willing to pay $4 for it.




It doesn't seem that expensive to me. DJS has no net debt, a property portfolio valued at ~$600m (on the books at $450m). There's some talk of building an apartment tower into the Market St building. So let's say they did a sale+leaseback of their property and using a cap rate of ~7.5% that's $45m off EBIT. So they've paid $1.4b for ~$100m EBIT in a tough retail market with the possibility of getting some kick along from any development of the Market St stores.. I'm sure they've penciled some efficiency gains, the jarps are usually pretty astute deal makers.


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## skc (10 April 2014)

McLovin said:


> It doesn't seem that expensive to me. DJS has no net debt, a property portfolio valued at ~$600m (on the books at $450m). There's some talk of building an apartment tower into the Market St building. So let's say they did a sale+leaseback of their property and using a cap rate of ~7.5% that's $45m off EBIT. So they've paid $1.4b for ~$100m EBIT in a tough retail market with the possibility of getting some kick along from any development of the Market St stores.. I'm sure they've penciled some efficiency gains, the jarps are usually pretty astute deal makers.




$1.4B for $100 EBIT which is ~$70m NPAT => PE 20. That's a department store in structural decline.

MYR has EBIT of $217m. Market cap is $1.38B + $300m debt. So EV/EBIT = 7.74x. NPAT was $132m so PE ~10x. Stripping the property away, both company faces the same macro operating environment. MYR, having just recently been owned by private equity, may have less scope for efficiency gains. 

MYR runs at NPAT/revenue of 5.04%, while DJS is at 3.8% using the sale and lease back assumptions above. So there's a 30% upside for DJS there (without really looking in detail the difference in D&A etc). 

Yet they valued DJS at 2x that of MYR. May be it means MYR is undervalued... perhaps they should buy MYR as well and average in.


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## Ves (10 April 2014)

skc said:


> $1.4B for $100 EBIT which is ~$70m NPAT => PE 20. That's a department store in structural decline.



They obviously think that there is more a case for cyclical decline than structural decline with DJS.

For the last 10 years (from 2004-2013) average EBIT was about $180m,  adjust for the leaseback I believe that makes it around $135m.  Which is close to 10.3x EBIT/EV.   Makes more sense if they looked at it in that light and factored in efficiency gains and brand rejuvenation.


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## skc (10 April 2014)

Ves said:


> They obviously think that there is more a case for cyclical decline than structural decline with DJS.
> 
> For the last 10 years (from 2004-2013) average EBIT was about $180m,  adjust for the leaseback I believe that makes it around $135m.  Which is close to 10.3x EBIT/EV.   Makes more sense if they looked at it in that light and factored in efficiency gains and brand rejuvenation.




Sure. That's pretty much the 30% uplift you get from improving NPAT/turnover to MYR levels. I don't think you can doublecount it again under efficiency gains/brand rejuventation etc. 

I guess my point is, even after all the margin uplift (which is not guaranteed), the deal is still some 50% more expensive than the most direct peer. The cyclical vs structural decline thing applies equally to MYR and DJS, so it's a moot point. They will need to make quite a few dollars on the property side just to make up for the gap.

And yes... I am long MYR as a trade so.. Sol Lew, can you please bid for MYR at the same 10x EV/EBIT? Please?!


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## McLovin (10 April 2014)

skc said:


> $1.4B for $100 EBIT which is ~$70m NPAT => PE 20. That's a department store in structural decline.




I disagree they're in a structural decline. They've both been poorly managed, although I think Zahra has been doing a pretty good job. There's been problems at board level at DJS, Zahra resigned then didn't, and don't forget they made an almighty FU when they decided to ditch the internet in 2006. 



skc said:


> Yet they valued DJS at 2x that of MYR. May be it means MYR is undervalued... perhaps they should buy MYR as well and average in.




It might. Or it might mean that they don't think they can juice out of MYR what they can from DJS. Your point about MYR having recently being in PE probably was in their mind too. Just looking quickly at DJS balance sheet, it looks like you could pull ~$60-70m out of WC and that would bring it in line with MYR. I'm sure a more detailed look would reveal a few more effciency gains.

Don't get me wrong, it's a really full price but I don't think it's a dud deal for WOWSA (Wowser?)


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## McLovin (11 April 2014)

And just to opine a bit further. I've always thought there was a lot of untapped potential in DJS. I'd like to see it become like a Selfridges in the UK. I also think they could take a leaf out of the M&S Food idea, which is seriously fantastic food for what is basically ready to eat packaged food. To me they just need to think a bit outside the box, yes the market has changed but it's not dead. Australia is a rich country, and the centres of Sydney and Melbourne especially have a lot of people with high disposable incomes + Asian tourists who like to spend. Instead of trying to compete on price go back to what they do well; quality service and upmarket brands.

Plenty of potential, IMO.


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## tinhat (11 April 2014)

McLovin said:


> quality service




That went out the door a few years ago.


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## McLovin (12 April 2014)

McLovin said:


> I also think they could take a leaf out of the M&S Food idea, which is seriously fantastic food for what is basically ready to eat packaged food.




Hey someone agrees with me!



> Moir said the department store rather than food was Woolworths’ focus in Australia.
> 
> However, if they could “do *something with the food offer and food *service offer that creates engagement and excitement” they would, he said.
> 
> ...




http://www.afr.com/p/business/companies/questions_over_future_of_david_jones_BEhgX6rVB9v9Gm0AeKHzYP


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## McLovin (20 May 2014)

Apparently the properties could be valued at ~$1b once the air rights are included. Woolies SA of course saying they had no knowledge of this before the takeover...Yeah OK.



> South African retailer Woolworths has opened the door to selling off David Jones’s $612 million property portfolio to reduce the cost of its $2.15 billion takeover offer.
> 
> In a circular to Woolworths shareholders, the food and clothing retailer says it intends to “review alternatives” with respect to David Jones’s freehold property assets once further information becomes available. This represents a subtle change in Woolworths’s position since it unveiled the friendly $4 a share takeover offer in April.
> 
> ...




http://www.afr.com/p/business/companies/woolworths_opens_door_to_david_jones_JnhuDLsiIJUWQNXtQbQ8CM


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## skc (24 June 2014)

You have to give it to Sol Lew. That is a great poker play. SA Woolworth blinked and now bidding for Country Road.

He's cashing out his Country Road position and he cashes in on his DJS stake.

Shame on those silly hedge funds who sold to Lew when he was acquiring. Shame on me for not reading the situation well enough to benefit as well...

Now I'd like to see some DJS shareholder make an application to the Takeover panel on differential treatment!


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## VSntchr (24 June 2014)

skc said:


> Shame on those silly hedge funds who sold to Lew when he was acquiring. Shame on me for not reading the situation well enough to benefit as well...




Im  this morning. I deliberated on DJS at $3.85ish for about a week...and some other poor directional trading led me to be gunshy and ignore a pretty decent probability play. An easy 4% missed!


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## McLovin (24 June 2014)

Ahh...I thought greenmailing was dead!

It's like being in the 80's


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## skyQuake (24 June 2014)

The SMH put it very succinctly



> Woolworths would be very aware that the deal cold[sic] get caught by laws that prevent one shareholder of a target company (ie Lew) from gaining a collateral benefit that would induce him to accept the offer.
> 
> Read more: http://www.smh.com.au/business/what...oad-revenge-20140624-3apz8.html#ixzz35X5sSr5n




edit: wow first mistake I ever caught in the SMH


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## skc (25 June 2014)

In the meantime, Myer recent "star recruit" turned out to have a falsified CV...

http://www.afr.com/p/business/compa...ecruit_andrew_flanagan_eGxUtQK8CcV8jEHGZngcBO



> Department store chain Myer has sacked one of its newest recruits and is considering legal action after what appears to have been an elaborate ruse involving some of the world’s *largest retailers.
> 
> Barely a week after trumpeting the appointment of Andrew Flanagan as general manager strategy and business development, Myer has terminated his position after just one day in the job upon discovering that he was not the man he said he was.




And most embrassingly...they found out after being contacted by their competitor.



> Myer chief Bernie Brookes was quickly *contacted by the managing director of Inditex Australia, Inigo de Llano, who set the record straight.




What a stuff up!


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## notting (25 June 2014)

> Andrew Flanagan as general manager




You never know.  He sold himself well.  Might have done a great job!

It would be funny if  whole point of Sol getting into DJs was to try to draw attention to his own group, in the hope of being taken over too!


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## System (10 August 2014)

On August 5th, 2014, David Jones Limited (DJS) was removed from the ASX's official list following implementation of the scheme of arrangement whereby Vela Investments Pty Ltd acquired all of the Company's issued shares.


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## Dividend (29 October 2017)

Hello, I want to find the historical share price of David Jones. How can I find it?


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## bigdog (16 February 2019)

Dividend said:


> Hello, I want to find the historical share price of David Jones. How can I find it?




*Try this ASX link which goes back to 1997!!*

https://www.asxhistoricaldata.com/archive/


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## bigdog (16 February 2019)

On August 5th, 2014, David Jones Limited (DJS) was removed from the ASX's official list following implementation of the scheme of arrangement whereby Vela Investments Pty Ltd acquired all of the Company's issued shares.

https://www.theage.com.au/business/...vid-jones-mid-renovation-20190214-p50xxm.html

*A wrecking-ball goes through David Jones mid-renovation*

*By Patrick Hatch*
February 15, 2019

The likelihood of divorce is said to spike when a couple is renovating their home. And so it was for the grand-dame of Australian retail this past week.

With the guts being torn out of David Jones’ flagship store in Sydney’s Elizabeth Street as part of an ambitious $200 million make-over intended to restore its position as Australia’s home of luxury shopping, it has abruptly parted ways with three of the most important people in the business.

Chief executive officer David Thomas resigned last Thursday for unspecified “personal reasons” and was out the door immediately, after 18-months running the 181-year-old department store.

A discrimination complaint was made against Thomas in November, but the company said an investigation found no evidence to support the claim and was not why he resigned.

Then five days later, respected directors Gail Kelly - a former Westpac chief executive and the first woman to run an Australian bank - and Patrick Allaway resigned from the board of David Jones’ parent company with immediate effect.

Again no explanation was given for the departure of Woolworths Holdings' only Australian-based directors - both regarded as corporate governance sticklers, and in Kelly's case a vocal supporter of corporate diversity and equality - just four months after they stood for re-election.

The information vacuum caused considerable speculation in business circles.

Several industry insiders theorised that Kelly and Allaway resigned either because they were unhappy with how Thomas and the discrimination complaint were handled, or had fallen out with other directors over Woolworths' broader strategy and management.

Allaway, who is a director of _The Age_ and _Sydney Morning Herald_'s owner Nine Entertainment, declined to comment and Kelly did not return calls. Thomas could not be contacted.

Investors were shaken, sending the South African retail group's shares down more than 8 per cent in the past week. Shareholders have now seen the price slide 20 per cent since January as the company's shares plumbed their lowest value since 2012.

"That investors are ‘concerned’ is the understatement of the decade," said Alec Abraham, a senior equity analysts at Sasfin Wealth in Johannesburg.

Woolworths' management and the board were already under intense scrutiny over David Jones, which it bought for $2 billion in 2014 and was trying to run while department stores were falling out of favour with shoppers globally, said Bjorn Samuels, an analyst at Argon Asset Management in Capetown, which has a small holding in the company.

"When one adds on the complication of introducing a new food format, completion of a $200 million flagship store, consolidation of head office with Country Road [which it also owns] and constant management changes you quickly have a recipe for disaster," he said.

After the events of the past week, more questions are now being asked about how the department store has been run, and about its high-turnover of senior managers.

It’s very well known that he was a tough-arse.

Thomas had not been in the top job for long enough to develop much of a public profile, but sources say he loomed large inside the business.

“He was an alpha male. Quite an intimidating figure....quite opinionated and quite vocal," said a former senior employee.

“It’s very well known that he was a tough-arse," one well-placed industry figure said.

"Erratic was another word you would use, and at times very fiery."

“There’d been a couple of incidents where he didn’t get his own way and he’d spat the dummy and walked out.”

A spokesman for David Jones said it was “focussed on fostering an inclusive culture and workplace for its team that does not differentiate based on race, religion, gender or sexual orientation.”

“David Jones does not tolerate discrimination in any form,” he said.

The 42-year-old joined David Jones as a senior executive in 2014 and was made CEO in September 2017, reporting to Woolworths' Australian boss John Dixon.

Dixon was ousted in a restructure in May last year, after David Jones moved its head office from Sydney to Melbourne. From then on Thomas reported directly to Ian Moir in South Africa.

The pair had what several sources remarked on as an incredibly tight relationship, forged during Thomas' 12-year career at Country Road when Moir was CEO and then chairman.

It was a tumultuous time for Country Road. Moir's replacement as CEO in 2010, John Cheston, was sacked just nine weeks into the job over "irreconcilable differences with the board over the future direction of the company”.

In a later court case, Cheston alleged breaches of corporate law over Country Road not being run at arms-length from Woolworths, which owned 88 per cent of the then-ASX listed company.

*Feeling the pressure*
David Jones has now churned through four bosses in five years - Thomas, Dixon, Ian Nairn - who left in 2016 also for "personal reasons" - and Paul Zahra, a long-standing executive who left shortly after Woolworths took over.

Other senior managers to depart David Jones over the same period include "fashion icon" and long-standing merchandise boss Donna Player; managing director of clothing and general merchandise David Collins; long-serving head of womenswear Damian Burke; chief marketing officer David Robinson, and top fashion buyer Kate Benson.

And Woolworths’ well-regarded Australian chief financial officer Ashley Gardner will depart at the end of the month and won’t be replaced, under the same restructure that claimed Dixon’s scalp.

Moir has now stepped in as acting CEO while the company tries find a permanent replacement.

“I'm sure Ian Moir will be feeling the pressure," said Duncan Artus, a portfolio manager at investment house Allan Gray, whose clients make up Woolworths’ largest shareholding with 15 per cent of the stock.

Artus thinks Woolworths share price isn’t reflecting the value of David Jones properly, and so has been buying shares in anticipation of future growth.

But he says the outlook will remain foggy through what is a “very disruptive” period for the business.

“There will only be greater clarity once the Elizabeth Street store refurbishment is complete, the result of the initial roll out of food in the stores is completed and the disruptive move of the HQ to Melbourne has settled down,” Artus said.

Abraham, from Sasfin Wealth, said he was concerned about the management departures and the questions they raised.

"Is the pressure to perform making Ian Moir desperate... and playing out in an overly aggressive management stance? Do the departing directors believe that the business is unlikely to recover?"

Abraham said investors were willing to overlook the "generous" price Moir paid for David Jones because they believed he would be able to unlock the brand's value as he had done at Woolworths


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