Monday, August 23, 2010

Direct Factory Outlet stores to be sold to repay $1 billion

Direct Factory Outlet (DFO) will be split up store by store and sold off to repay almost $1 billion owed to banks after development of the DFO South Wharf outlet stalled when cash dried up.

DFO owners Austexx, run by David Goldberger and David Wieland as reported in The Age will be forced to split up the nine DFO outlets to service the $1 billion owed to NAB, St George, Bank of Scotland International and Suncorp-Metway, made up of $550 million for the South Wharf DFO development and $450 million in other debts.

Australian Competition and Consumer Commission boss Graeme Samuel, is expected to fail to recoup the $50 million invested in Austexx via a blind trust once DFO’s operations are bundled up and sold.

Late last week a deal was struck between DFO’s David Goldberger and David Wieland and NAB, St George, Bank of Scotland International and Suncorp-Metway to roll over debt on the South Wharf DFO development in order to avoid a fire sale of the underdeveloped project and not realise the full value from the development. The four banks hope that holding off breaking up the DFO group will result in less losses for their investment.

SOURCE: dynamic business By David Olsen on Monday, 23 August 2010
Posted by Unknown at 12:09 PM
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2 comments:

  1. Larry FrankenbachAugust 24, 2010 at 10:17 PM

    I am developing 164 acres, one mile of Interstate 40 visibility, between two exits to Lebanon, TN in one of the fastest growing counties in the state. Simon just bought the Prime Outlet on the other side of I-40. My site is 35 minutes from the Nashville CBD, 20 minutes from BNA. Would other outlet developer consider locating on my site, or should I pursue the interest I already have from mid-level traditional "box" retailers downsized to match the market?

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  2. UnknownAugust 25, 2010 at 9:57 AM

    I know the Lebanon center, I used to have a store there. Its definately a B or C outlet center.

    In my experiance, no outlet developers wants to go head to head against a Premium mall unless its a huge market like Orlando or Las Vegas. There are a few exceptions. Tanger and Prime(now Premium)compete in San Marco's TX, but you are drawing from both Austin and San Antonio. In St. Augustine there is a Premium and Prime center, but frankly the Prime center has struggled.

    Its really not so much about not going head to head with Premium as much as how many outlet stores a single market can handle.

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