‘Kind of like Blockbuster’: David Jones should be a warning to Australia’s shrinking brick-and-mortar retailers

Exclusive: A cash-strapped David Jones teetering on the verge of collapse should be a warning to chain stores that refuse to “innovate”, a former supplier says.

After 188 years in business, the iconic department store’s luck has run out.

The mammoth cost of running 38 stores and paying the wages of 6000 staff has pushed the department store giant into voluntary administration.

It comes as no surprise after the retailer posted a pre-tax loss of $95.5 million for 2025.

Westfield’s parent company Scentre has also claimed David Jones is yet to pay its October rent for 17 of its locations.

It also has stopped selling gift cards and told customers any new purchase will not be eligible for a refund.

Brisbane retail expert and entrepreneur Jellaine Dee, who sold her former makeup brand Cherry Blooms in David Jones, claimed dwindling foot traffic has been an issue at the retailer for years.

Dee said she made more sales at a “local suburban salon” than she did at the flagship David Jones store on Sydney’s Elizabeth Street, despite hitting $10 million in annual revenue by 2016.

“In the 25 stores I was in, only about five of them actually had really good foot traffic. The rest were really quiet,” Dee told nine.com.au.

“And that was nearly 10 years ago.

“For me, 25 stores in David Jones was not going to pay the bills.”

Suppliers are now left in the lurch as administrators ponder over the brand’s fate in the lead-up to Christmas.

Porter Jewellery, based in Bondi, revealed it sent $50,000 worth of stock to the department store the morning the news of David Jones’ demise was announced.

Chloe Barry-Hang’s premium cotton terry-towelling robe business K-Juliet had been added to the David Jones line-up just days before it fell into administration.

Judging by her own sales in the department stores, Dee said these suppliers will likely emerge largely unscathed.

“From my experience, it didn’t really pay. They didn’t pay well, and they paid very slow,” Dee said.

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Dee launched Cherry Blooms into luxury US chains Saks Fifth Avenue and Bloomingdale in 2016 after struggling to gain a strong enough foothold in Australia’s department store duopoly.

Though the US population is roughly 13 times the size of Australia’s, she said a large part of Saks and Bloomingdales’ ongoing success stems from innovation.

She described David Jones as “really slow to evolve”.

“They’re not creating experiences, and that’s the big difference,” she said.

“The marketing wasn’t that great, there were a lot of things that I didn’t know that you could do at David Jones....

“When I look at Mecca and Sephora and how they’ve created a beauty destination, they could have easily ridden that wave and been innovative or partnered up.

“But instead they’re kind of like Blockbuster.”

Dee sold her beauty brand to a private equity firm in 2018 and now consults companies who want to get their products into department stores through her business Mogul Methods.

Though it is a grim time for the retail giant, appointing administrators is unlikely to be the death knell for all David Jones stores.

Dee expects, if a buyer is found, that the retailer’s future owners will trim the fat, close down a portion of stores and return with a refreshed look.

“We all have our fingers crossed that someone will come in and buy it and restructure it and delete the bloated stores that aren’t performing,” she added.

“That’s what I’m hoping will happen. But if we’re just getting the same old thing...

“It needs a new strategy.”

David Jones’ flagship stores have anchored both the Sydney and Melbourne CBDs for decades.

The future of these sprawling retail hubs is now in doubt.

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Committee for Melbourne chief executive Cath Evans said Thursday’s news should be a “wake-up call” for the struggling retail sector.

“The Bourke Street store is more than a retailer. It is part of the fabric of Melbourne and has helped make Bourke Street Mall one of the city’s great destinations for generations,” Evans said. 

“We sincerely hope the store can remain open and continue to be at the heart of Melbourne’s retail precinct.

“When major retailers struggle, the implications extend well beyond the shopfront to tourism, hospitality, city workers, residents and Melbourne’s broader attractiveness as a destination.”

What happens to David Jones now?

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 while 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.”

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.

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.

David Jones has not announced which stores, if any, it plans to shut down.