David Jones Ltd (ASX:DJS) has defended its decision to end its supply arrangement with Australian label sass & bide, after rival retailer Myer Holdings Ltd (ASX:MYR) yesterday snapped up a 65 per cent interest in the fashion brand.
Myer paid over $42 million for the stake in sass & bide, and will gain the exclusive rights to distribute the designer and launch the merchandise in its stores.
David Jones CEO Paul Zahra says the department store could not justify the price paid for the business considering its lack of growth, with 2010 sales of the brand flat with 2005 levels.
David Jones, who have partnered with sass & bide for 10 years, will no longer carry the label that contributed to around 0.5 per cent of DJ's sales.
David Jones generated a net profit of $170.8 million in the 2010 financial year.
DJS Price at posting:
$4.53 Sentiment: None Disclosure: Held
