NEWCASTLE: David Jones is set to close the doors on its Newcastle (NSW) store in the wake of the shelving of a city redevelopment project.
The national department store announced it will exit its Newcastle CBD site when its lease expires on January 31, 2011.
The decision follows the announcement by property developer, GPT Group, that it will no longer go ahead with its $600 million redevelopment in the City of Newcastle due to “a lack of commitment from the [NSW] government”.
David Jones had previously entered into an agreement with the GPT Group to lease a new department store within the redeveloped city centre.
David Jones CEO Paul Zahra said the company was “disappointed” the redevelopment was not going ahead as the department store has traded within Newcastle for over 50 years.
“We have however made excellent progress in the refurbishment of our nearby Kotara store which is on track to be completed by October 2010 and will service the Hunter/Newcastle region when the David Jones Newcastle store closes,” Zahra said.
“We are confident of migrating customers and sales from our Newcastle store following its closure, to our Kotara store and of enhancing our profit due to the lower cost base of not operating a store as old and as in need of refurbishment as our Newcastle store.”
David Jones' Kotara store is seven kilometres away from its existing Newcastle site. David Jones indicated Newcastle staff will be redeployed to its larger Kotara store.