Direct Factory Outlets

Direct Factory Outlets
Location Australia Various, Australia
Owner Direct Factory Outlets Pty Ltd
No. of floors 1-2
Website www.dfo.com.au

Direct Factory Outlets, abbreviated as DFO, is the name for a no-frills group of discount shopping centres in Australia. They are large-floor warehouse buildings containing partitioned stores where retail outlets sell excess or previous seasons' stocks at reduced prices.

Business model

It model is to find cheap land, build a cheap but air-conditioned shopping mall.[1]

The Direct Factory Outlet retail chain is owned by the privately owned Austexx Group, led by David Goldberger and David Weiland with their first centre opened at Moorabbin Airport (Cheltenham) in 1997.[2] ACCC chief Graeme Samuel holds a $50 million interest in Austexx through a blind trust.[3] Valued at A$1.5 billion, in early 2010 the business was put up for sale with a number of retail investment funds expressing interest.[4]

DFO centres have traditionally been located around airports: a side effect of the Airports Act of 1996, the Commonwealth Government has planning control over the land, meaning state planning legislation can be bypassed by developers.[5] In addition the property developer is able to exploit the cost difference between retail and industrial rents, gives outlet centre operators a distinct advantage over traditional shopping centres. A survey by Melbourne newspaper The Age in 2007 found that in all three DFO-owned centres, most shops carried at least some full-price, current-season stock, available at normal shopping centres.[6] By 2008 five legal challenges to DFO developments have been made by competing retail developers and the Shopping Centre Council of Australia, all being unsuccessful.[5]

On 16 August 2010, lead bank Suncorp-Metway, along with St.George Bank, National Australia Bank and Lloyds Banking Group, issued a notice to parent company Austexx demanding repayment within 24 hours of the A$450 million they are owed.[7] The South Wharf centre was under a A$500 million debt, with work on completing the centre stopped after workers placed bans over non-payment. Parent company Austexx is understood to have total debts of A$1.2 billion, with the four relatively successful DFO sites used as cross-collateral for bank-funded expansion into five other less successful locations (Canberra, Cairns and Hobart). The group of banks appointed insolvency specialists KordaMentha as advisers, with the entire group facing receivership.[8] Negotiations continued until a deal was struck on Thursday 19 August, the four banks extending their funding to allow the South Wharf development to be completed. The ten DFO shopping complexes will then be sold off separately to repay the $1 billion owed to the banks.[3] The banks hope to recoup most or all of the money they are owed by avoiding a 'fire sale' of assets, but neither Austexx founders or other investors are expected to be repaid until the bank debts are settled.[3]

Locations

Direct Factory Outlets (DFO) locations are:

Australian Capital Territory

New South Wales

In 2009, a DFO in Wollongong, New South Wales near the Kembla Grange Racecourse was proposed, but was rejected by the Wollongong City Council.[9]

Queensland

DFO Brisbane Airport

Tasmania

Victoria

Former Direct Factory Outlets at Spencer Street

Between 2005 and 2009 DFO Spencer Street operated as part of the Southern Cross Station complex. Tenants were relocated from 15 October 2009 to the new DFO at South Wharf, the Spencer Street centre being refitted and rebranded by Austexx as "Spencer Street fashion station".[13]

Retailers

Direct Factory Outlets is home to numerous retailers throughout Australia including Billabong, Burberry, Nick Scali Furniture, Country Road, Oroton, Guess, Hugo Boss, Topshop, Polo Ralph Lauren and Esprit Holdings amongst many other well-known brands.[14]

See also

References

  1. ↑ "theage.com.au - The Age". The Age (Melbourne).
  2. ↑ Pallisco, Marc (9 February 2010). "Ownership of 1.5 Billion DFO Retail Chain to Change". realestatesource.com.au. Retrieved 10 May 2010.
  3. 1 2 3 Bachelard, Michael (22 August 2010). "DFO carve-up to pay banks". The Age (Melbourne: www.theage.com.au). Retrieved 2010-08-23.
  4. ↑ Cummins, Carolyn (26 April 2010). "DFO sale signals trusts are finally turning corner". Sydney Morning Herald. Retrieved 10 May 2010.
  5. 1 2 "Factory outlet centres go from strength to strength". Inside Retailing. 21 April 2008. Retrieved 10 May 2010.
  6. ↑ "Direct factory outrage". The Age (Melbourne). 31 October 2007. Retrieved 10 May 2010.
  7. ↑ Gluyas, Richard (18 August 2010). "Last-ditch effort to save DFO shopping empire". The Australian (The Australian). Retrieved 18 August 2010.
  8. ↑ Dunlevy, Maurice (17 August 2010). "Melbourne DFO faces receivership with $500m debt". Herald Sun. Herald Sun. Retrieved 18 August 2010.
  9. ↑ How state axed $125 mil megastore for Kembla Grange
  10. ↑ "Future of Controversial Big Box in Federal Hands". The Mercury.
  11. ↑ "DFO on the way". The Mercury. 25 February 2008. Archived from the original on 26 February 2008. Retrieved 25 February 2008.
  12. ↑ "theage.com.au - The Age". The Age (Melbourne).
  13. ↑ Pallisco, Marc (3 October 2009). "DFO South Wharf, Melbourne, to Open October 15". realestatesource.com.au. Retrieved 10 May 2010.
  14. ↑ DFO Retailer Locator.

External links

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