Arabic version: إغلاقات ديفيد جونز تسلط الضوء على الضغوط المالية في الضواحي الخارجية

According to ABC News, economic pain in outer suburban areas may have accelerated the problems that overtook David Jones, with property and retail experts pointing to mortgage stress and changing shopping-centre models.

The 188-year-old retailer announced on Wednesday it would close 19 stores across Australia and New Zealand. Most of the closures are in metropolitan outer suburbs, including Hornsby, Parramatta and Campbelltown in Sydney; Maribyrnong and Glen Waverley in Melbourne; and Robina on the Gold Coast.

Howard Penny, Citigroup’s head of Real Estate and Infrastructure Research for Australia and New Zealand, said five interest rate hikes this year had created a disproportionate negative impact for consumers with mortgages in newer, emerging areas. S&P Global Ratings data released this week found households in some outer suburbs of Sydney, Melbourne and south-east Queensland were more than twice as likely to be experiencing mortgage stress as the national average.

Nine of the closing stores are in Westfield centres owned by Scentre Group. David Jones stopped paying rent in September, and Scentre had offered discounted rents for the retailer to continue trading. Mr Penny said there could be a short-term impact on income and rent, but he expected the centres to be stronger within 18 months. Scentre chief executive Eliott Rusanow said occupancy was 99.8 per cent and demand for space was strong.

Queensland University of Technology retail and marketing specialist Gary Mortimer said major suburban centres were moving away from reliance on traditional department-store anchor tenants. He said centres now included health and service precincts, libraries, gyms, childcare, car washes and other experiences, and could adapt as local demographics and spending pressures changed.