David Jones pays $1 for Kirkcaldie & Stains lease

Tuesday, 5 January 2016

Kirkcaldie & Stains may have more than 150 years of history but its lease has gone for $1.

David Jones' move into New Zealand was given the green light by the Overseas Investment Office (OIO) in November but was made public by the office on Tuesday.

A  Kirkcaldie & Stains statement to the NZX in November said the Australian shopping mall operator had been granted OIO approval, meaning the agreement to take over the lease of its Lambton Quay main store was now unconditional.

On Tuesday the OIO released its decision summaries for November 2015, which shows the consideration for acquisition of a leasehold interest in about 0.6617 hectares was sold for $1.

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The sale was approved by the OIO on the basis that it added market competition, greater efficiency for productivity and additional investment for development purposes.

The decision says David Jones was acquiring the lease for Kirk's premises and would refurbish and open its first 'David Jones' branded store in New Zealand in 2016.

The cost of the refurbishment is expected to be about  $20 million.

Under the terms of the deal, David Jones is paying A$400,000 (NZ$428,000) to take over Kirkcaldie & Stains' lease and buy the rights to use its name.

Kirkcaldie & Stains, which opened in 1863, is set to close within the next few weeks, with David Jones, which is owned by South African company Woolworths Holdings, expected to open in mid-2016.