Is this the beginning of the end for Aussie department stores?

For generations, they were the beating heart of Australian retail.

But today, Australia’s iconic department stores are facing a brutal new reality: survival.

After nearly 190 years in business, David Jones is battling falling sales, mounting losses, and an exodus of major fashion brands.

The department store has reported a $95.5 million pre-tax loss, with sales plunging almost 9 per cent as questions mount over its future.

Country Road, Witchery and Mimco are among the brands looking to scale back their presence, while luxury labels including Gucci, Chanel and Christian Dior have already reduced their footprint.

Stores at Castle Towers in Sydney and Tuggerah on the Central Coast have closed, the latter after 30 years.

Retail historian Dr Matthew Bailey said the retailer faced difficult trading conditions, and suppliers also raised concerns about payments.

But trouble extends well beyond David Jones, with department stores worldwide struggling to compete with online shopping and standalone retailers.

Bailey said the decline began decades ago, when department stores helped establish the very shopping centres that would eventually compete with them.

“When department stores started building shopping centres, in many ways, they sowed the seed for their own destruction,” he said.

Fashion journalist Patty Huntington believes David Jones can still turn things around, but says the retailer desperately needs a fresh approach.

“David Jones needs some magic, I think more than ever before,” she said.

Despite the bleak financial picture, Bailey believes department stores still have a future, although they may eventually be confined to major cities.

Media statement from David Jones

CEO Erica Berchtold is re-prioritising, energising and accelerating the execution of the David Jones INSPIRE30 growth strategy and is in advanced discussions with key stakeholders about how David Jones is evolving to meet the challenges of an ever-changing retailing landscape.

Throughout its history, David Jones has seen brands come and go, and currently, the company is experiencing a reconfiguration of its relationship with certain brands.

While this reconfiguration is underway, David Jones is continuing to offer the best shopper experience in Australia with an extensive and growing portfolio of exclusive and private labels, many of which are only available at David Jones.

Our evolution is based on meeting the needs of our customers.

The current focus is providing brand partners with store locations that offer the strongest potential for growth.

There is a planned approach with Country Road Group that involves optimising their brand portfolio within David Jones and the Company is keeping the brands and stores that represent over 70 per cent of the joint business.

As part of a review of the store portfolio and trading terms with suppliers and brand partners, David Jones is working collaboratively with all stakeholders about an adjustment in the level of exposure for some brands across the store network.

This review is no different to what major department stores have undertaken in other parts of the world where they have embarked on a transformation of their store network.

David Jones is putting its customers first in creating a sharper, higher-quality physical network of go-forward stores while accelerating digital growth.

There is an emphasis on premium products and services.

The reset will ensure the business is growing its online capability, modernising supply chain and fulfilment, improving productivity, reviewing commercial and brand partnership models, and increasing differentiation through a stronger private label offer.

This is an ordinary-course commercial strategy dealing with a structural, system-wide shift in global retail trends.

It is being undertaken with committed ownership and financing to position the business for sustainable long-term success for customers, suppliers and the brand.

A key driver of the normalisation of terms with suppliers and brand partners is a review of concessions, wholesale and partnership models.