David Jones enters voluntary administration for first time in 188-year history

Iconic retailer David Jones has entered voluntary administration, with stores expected to be closed and thousands of jobs at risk.

The board handed control of the 188-year-old department store chain to voluntary administrators from McGrathNicol after meeting on Thursday morning.

Christopher Hill, David McGrath and Joanne Dunn, of FTI Consulting, have been appointed receivers and will run the business until it is restructured and put up for sale.

David Jones has been owned Anchorage Capital Partners since 2023.

In a statement on Thursday, David Jones chief executive Erica Berchtold said physical and online stores are continuing to trade under the control of the receivers, whilst they review current operations.

“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,” she said.

“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.”

Hill said entering voluntary administration provided a “breathing space” for David Jones and an opportunity to restructure the business.

“We understand the current retail trading environment, rising costs, a significant and outdated retail footprint, and supply chain challenges have led to this point,” he said.

“Voluntary administration and receivership provides breathing space and an opportunity to restructure the business.

“We will manage this process carefully, mindful of the impact on some stakeholders but also recognising the need for difficult decisions.”

It comes after Westfield’s parent company said David Jones was in breach of its tenancy agreement after failing to pay rent in October.

On Wednesday, Scentre, the parent company of Westfield, where 17 of David Jones’ 38 stores are located, said the department store has not paid its rent since September and had rejected a “generous” offer from the landlord.

“They … therefore are in breach,” chief executive Elliott Rusanow said in a statement.

“We have made a generous offer to Anchorage Capital Partners that would have facilitated the continuation of David Jones trading and that offer has disappointingly been rejected by them.”

David Jones has been paying significantly less than the standard going rate for Westfield floorspace.

Other landlords are also owed rent by David Jones.

Advertising expert Dee Madigan, owner of the Creative Edge agency, earlier told Today she expected David Jones to enter voluntary administration.

She said its failure was down to management failing to revamp the company and distinguish it from online competitors.

“If I was David Jones, I would have maybe four or five flagship stores only and have an online experience that backs that up.

“But I would just be pumping money into making that in-store experience, something you simply couldn’t replicate online.

“Whether it’s stylists in there, whether it’s champagne nights, whether it’s free coffee. Bring back the piano player. Really try and make the brand successful.”

The future of 26 of the retailer’s stores in Australia and New Zealand now hang in the balance.

Analysis by financial services firm MST Marquee stores pinpointed some of the stores designated for closure, The Sydney Morning Herald reports.

They are Westfield Parramatta, Warringah Mall, Carindale in NSW, Indooroopilly Shopping Centre, Robina Town Centre, Sunshine Plaza in Queensland, Westfield Marion in South Australia, Westfield Doncaster, Southland, Carousel, Booragoon in Victoria, and Karrinyup Shopping Centre in Western Australia. 

David Jones customers are also being urged to spend their gift cards as soon as possible.