Australian retail giant David Jones has entered voluntary administration following years of mounting financial difficulties, putting around 6,000 jobs at risk. The country’s oldest department store chain, which has operated for 188 years, informed employees of the decision on Thursday after failing to meet its rental payments to Westfield owner Scentre Group.
Despite the development, David Jones’ physical outlets and online operations will remain open while administrators McGrathNicol and receivers FTI Consulting assess the business and its future prospects.
The decision came just hours after Scentre Group revealed that the retailer had failed to pay its October rent, placing it in breach of its tenancy agreement.
Christopher Hill of FTI Consulting said the company’s difficulties reflected a combination of challenging retail conditions, increasing operating expenses, an outdated and extensive store network, and ongoing supply chain pressures.
CEO Erica Berchtold told workers that the department store will continue to trade in stores and online.
She wrote to the staff: “For today, our stores and online operations remain open and trading. You remain employed and should continue your normal duties unless you are directly advised otherwise.”
The move follows the breakdown of rescue talks with major landlord Scentre Group, Westfield’s parent company.
Ms Berchtold said: “David Jones is an iconic company and so many Australians have stories and memories of visiting DJ’s stores and I thank customers, our team members and our partners for their continued support for David Jones through this period,’
“We have a well-developed plan on how to reset the business for the future and will be working with the Administrators, the receivers and our secured lender as we continue to pursue that reset of the business”
Meanwhile, David Jones has confirmed that customers will continue to be able to use their gift cards despite the company entering voluntary administration.
Established in Sydney in 1838, the retailer holds the distinction of being the world’s oldest department store still operating under its original name.
The business was acquired by South African retail group Woolworths Holdings in 2014 for approximately $2.1 billion.
However, in 2023, Woolworths sold the retailer’s operating business to Anchorage Capital Partners in a deal reportedly worth $100 million.
