Melbourne is set to become the country's department store capital, with venerable 178-year-old chain David Jones planning to shift its headquarters from Sydney to Melbourne.

David Jones' owner, South African retail giant Woolworths, said Melbourne was the fashion and retail capital of Australia. Its real estate costs are also cheaper.

David Jones was opened by a Welsh immigrant of the same name on the corner of George and Barrack streets, Sydney, on May 24,1838. He said he wanted to sell "the best and most exclusive goods" and to carry "stock that embraces the everyday wants of mankind at large".

Now, David Jones' new owner has outlined a new headquarters in inner-city Richmond for all its businesses, including David Jones, Trenery, Country Road and Mimco.