Germien du Plessis, Bravura’s corporate finance principal, Sydney
South African companies expanding into Australia are again making headlines, this time with Woolworths announcing that it faces an impairment charge for David Jones of A$712.5 million (R7 billion). Woolworths acquired David Jones for R23.3 billion in April 2014, concluding the largest Australian deal at that time by a South African retailer. Now, with the Woolworths share price eroding by 39% from its high in November 2015, it seems that the company underestimated the “tough and unprecedented trading conditions, a cyclical downturn and structural changes that have impacted performance across the Australian retail sector”, the reasons cited for poor performance. (more…)
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