DJs talks down Coles Myer merger
David Jones' CEO Peter Wilkinson has dismissed rumours of a merger between DJ's and Coles Myer. Speculation emerged last week about a possible union between the retailers, but Mr Wilkinson said it was driven more by thoughts on a hypothetical situation rather than practical realities. Each group has its own agenda and plans for next year, he said. The idea of a merger is a “lovely intellectual exercise” but a very complicated fact.
David Jones will concentrate on delivering business improvements over the next 12 months and seeing that this is reflected in the share price, Mr Wilkinson said. Seven years ago, investors in the float paid $2 a share; last Friday it closed at $1.09. In a Deutsche Bank research report last week a target price of $1.10 was set within a 12-month period. The bank said the retailer's store portfolio was quite healthy, with over 50 per cent of the sales being generated by the top six to eight stores. Even the worst-performing six to eight stores are profitable on an individual basis, Deutsche Bank said.