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11 Feb, 2014

The department store era is over – Sydney Morning Herald

Capitalism is cruel on the long-lived. Entrenching cultures and ways of doing things, the passing of time breeds complacency in the old on which the new pounce.

David Jones was founded in 1838, Myer in 1900. Whether they merge or not, and it would make sense to do so, both are unlikely to survive in anything but a token form in a decade or so.

DJs and Myer emerged from capitalism’s primordial soup caked in a belief that their magnificent brands and fine service, when you can find someone to deliver it, would always lure customers.

A 15-year credit boom that delivered profitable growth hid the changing reality. Instead of adapting to a new environment, higher costs were passed on to customers and difficult choices, like renegotiating rents or closing stores, were avoided.

Online retailing got underway in the dotcom era and to its credit DJs got in early, picking up the assets of three failed ‘etailers’. But three years and $28m later, former CEO Mark McInnes closed the sites down.

Read the rest: The department store era is over.