David Jones Ltd (ASX:DJS) has announced that it will exit its Newcastle CBD store lease as a result of GPT Group (ASX:GPT) withdrawing from its proposed $600 million redevelopment.
Property trust GPT Group yesterday said a lack of commitment from the Government forced its decision to exit the land holding adjacent to the Hunter Street Mall.
As a result David Jones says that it will exit its lease when it expires on 31 January next year.
CEO Paul Zahra says the company is disappointed the redevelopment is not proceeding given that David Jones has traded in the area for more than 50 years.
However Mr Zahra says the refurbishment of the nearby Kotara DJs store is on track to be completed by October and will service the region when the Newcastle store closes.
David Jones advises that it will redeploy staff from its Newcastle store to its newly enlarged Kotara store, which upon completion will deliver a 33% increase in space.
David Jones reported a profit of $156.5 million for the year to 30 July 2009.
DJS Price at posting:
$5.04 Sentiment: None Disclosure: Held
