👉 Background: Woolworths Holdings is the South African company that owns both David Jones and Country Road Group (that’s the group of Country Road, Politix, Trenery, Mimco and Witchery).

👉 What happened: Woolworths Holdings agreed to sell David Jones to new owners in December 2022. And this deal is planned to go through by the end of March. But it kinda looks like Anchorage Capital, the new owner of DJs, has picked up David Jones juuuust as its fortunes begin to improve.

👉 What else: For the past six months, DJ’s sales increased by 35% and its gross profit margin jumped too. But despite the uplift, the Woolworth’s CEO reckons David Jones is a “strategic distraction”.

What's the key learning?

💡 When a larger company, or conglomerate, has multiple smaller businesses, it can be challenging to manage and grow them all effectively.

💡 Supposedly, over the past few years, David Jones has taken up too much of the company's time, resources, and attention. And that prevents the parent company from focusing on its core operations and growth opportunities.

💡 So by offloading David Jones, aka the problem child, Woolworths Holdings will be able on its businesses that are delivering better returns, like Woolworths in South Africa and The Country Road Group.

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