In short:
David Jones is closing 19 stores across Australia and New Zealand, with the majority to close in metropolitan outer suburbs.
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majority → close → suburbs
Property analyst Howard Penny says outer suburbs were disproportionately feeling mortgage stress.
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suburbs → say → stress
According to retail expert Gary Mortimer, a changing business model is forcing major suburban centres to adapt to survive.
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model → accord → centres
Acute economic pain being felt in the outer suburbs may have accelerated the demise of David Jones, according to property and retail experts.
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pain → feel → experts
The 188-year-old shopping giant announced on Wednesday that it would close 19 stores across Australia and New Zealand, with the vast majority being in metropolitan outer suburban areas.
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majority → announce → areas
He said that was a symptom of the financial strain in those areas after five interest rate hikes this year.
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that → say → hikes
"I think that what you're seeing is a disproportional consumer impact in these new emerging areas and it's probably a disproportional negative impact on those consumers with mortgages, at the end of the day,"Mr Penny said.
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Penny → think → day,"Mr
S&P Global Ratings data this week revealed that households in some outer suburbs in Sydney, Melbourne and south-east Queensland are more than twice as likely to be experiencing mortgage stress than the national average.
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households → reveal → average
"It's new home buyers, it's young families, et cetera, and naturally the areas where these types of consumers are, are in the newer areas further out in the cities," Mr Penny said.
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Penny → say → cities
The announcement has also raised questions about how large suburban shopping centres will fare losing a large anchor tenant.
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centres → raise → tenant
Nine of the stores that are closing are in Westfield shopping centres, owned by Scentre Group.
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that → close → Group
Scentre had offered David Jones discounted rents to continue trading, after the department store stopped paying rent in September.
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store → offer → September
Howard Penny said there was likely to be a short-term impact on Scentre Group, but that was unlikely to threaten the viability of its shopping centres in the outer suburbs.
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that → say → suburbs
"Although we are, in the short term, a little concerned as to the short-term impacts on income and rent due to the disruption, in the medium term, we remain optimistic, and we believe that in 18 months, these shopping centres may actually look even stronger on the back of this," he said.
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he → remain → this
"Our business is practically full, with occupancy at 99.8 per cent and strong demand for space," Mr Rusanow said in a statement.
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Rusanow → say → statement
"We have a unique opportunity at 17 Westfield destinations to introduce and grow local and international brands and experiences that our customers want.
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customers → have → that
Gary Mortimer is a professor at the Queensland University of Technology who specialises in retail and marketing.
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who → specialise → retail
He said the closures represent the changing business model of major suburban centres.
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closures → say → centres
"A big centre once might have included an anchor tenant, be that a department store, and possibly a discount department store and a supermarket," Professor Mortimer said.
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Mortimer → include → tenant
"Today, those centres have changed.
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centres → change → ?
Those centres are now underpinned by precincts: health precincts, services precincts, libraries, gyms, childcare, car wash facilities and a whole wide range of experiences and offers.
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centres → underpin → experiences
He said the changes in the composition and socio-economic pressures in outer suburban areas require shopping centres to adapt to survive.
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changes → say → centres
"As the demography of those suburbs changes and the centre now is better representative of a Kmart, Target, Big W discount department store than a traditional department store, I think they'll have no problems filling that space," Dr Mortimer said.
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Mortimer → change → space
The Aporia
