M&A in Department Store - Australia

Department stores have long been part of the Australian retail environment. Woolworths began in 1924 as a general merchandise retail operation. David Jones opened his first store in 1838 to sell imported merchandise, and the origins of Myer can be traced back to 1900 when Sidney and Elcon Myer opened their first Myer drapery store.

Maturity within this industry has been evident in the merger and acquisition activity of its major players over the past decade For example, in 1999 David Jones acquired the Aherns chain in Western Australia to expand market share. In addition, Japanese retailer Daimaru exited the Australian market in July 2002, due to poor performance within the industry, while in mid-2006 Coles Myer sold Myer to a private consortium for $1.4 billion and in November 2007, Wesfarmers acquired Coles Group, which included Kmart and Target.

In 2012, Harris Scarfe, a smaller industry player, was acquired by South African-based Pepkor. This latest acquisition is perhaps indicative of Australian department stores vulnerability to the rising possibility of globalisation.