We believe that the private label rollout in David Jones has fallen well short of management’s expectations, and plans now to invest AUD100m in food retailing in Australia and AUD200m in a lavish department store, are alternate strategies sought by management to extract value out of the 2014 David Jones acquisition. We caution that a key factor for WHL success in food retail in SA may not be present in Australia, namely a significantly inferior food product, to which David Jones can offer a product with a “Quality Difference” that is discernible to the average customer.
