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Department store chain David Jones will be back under Australian ownership, after being bought by a private equity firm.

Anchorage Capital Partners announced it would acquire the 185-year-old brand after reaching an agreement with previous owners, South African-based Woolworths Holdings Limited.

Woolworths bought David Jones in 2014 for $2.1bn, but neither group disclosed what the sale was worth.

The deal is expected to be completed by the end of March next year.

A spokesperson for Anchorage said the firm would work closely with the chief executive of David Jones, Scott Fyfe, on the company’s transformation.

“Under this team’s stewardship, David Jones is now profitable, cash-generative, and self-funding, and we are confident in David Jones’ next chapter as the retailer of the future with a seamless omnichannel experience,” the spokesperson said.

“This transaction aligns with Anchorage’s investment strategy and its successful track record of executing complex carve-outs.

“David Jones has a storied history, immense brand value and unparalleled assets – including an attractive retail footprint, a loyal customer base, and dedicated employees.”

Fyfe said Anchorage shared the company’s vision for how the stores would look into the future.

“Together, we see many opportunities to optimise value and innovation in the David Jones business as we enter a new phase of growth,” he said.