David Jones to close half its stores as administration continues

David Jones, the Australian department store chain, is in administration and under receivership. According to The Guardian, the company has announced the closure of half of its 38 stores. Nineteen outlets are expected to shut, and receivers anticipate that most will be closed by the end of the year.

Two separate appointments now control the business. FTI Consulting is running the company as receiver, while McGrathNicol, acting as administrator, is looking for a buyer for the stores that remain. Anchorage Capital, the private equity firm that owned the business, no longer controls it, although it may bid to buy back a smaller network.

Which stores are affected

No official closing date has been set for the 19 stores due to shut. Store managers have been told to clear their stock, so shoppers can expect a number of discounts. Most of the affected outlets are in outer suburban and regional areas, but there are some exceptions. The Perth store on Hay Street Mall, a prominent city location, will also stop trading soon.

Prospective buyers will bid for the stores left after the closures, which are located in premium and prime positions. Further closures have not been ruled out. Creditors and bidders are expected to gain a clearer view of the company’s finances in the coming weeks.

Financial problems before the collapse

The retailer had been under strain for some time. It reported a loss of $74m for the 2024 financial year and then failed to release its 2025 accounts. Reports indicate it had also fallen behind on payments to suppliers as early as April, and in some cases had not paid invoices at all.

Suppliers have lost trust in the business, and some brands pulled out over unpaid bills. Winning those partners back will be necessary for any recovery. The Guardian notes that the company’s main rival, Myer, is running heavy price promotions, which adds to the pressure on David Jones.

Shoppers return and the outlook

After receivers were appointed, customer numbers rose sharply. Some visitors wanted to say goodbye, believing the stores would close at once. Others used gift vouchers before they could become worthless, and some hoped for a closing-down sale. The Guardian’s commentary suggests the surge could lead to a stronger Black Friday and Christmas period, but it would not solve the company’s deeper difficulties.

Analysts say the wider retail sector is also struggling. Repeated interest rate rises and higher living costs have reduced spending on non-essential goods. Any new owner would need to invest heavily in the stores, restock them and rebuild relationships with brands, which could take considerable time and cash.

Who could take over

In 2023, the South African group Woolworths Holdings sold the operating business to Anchorage Capital for roughly $100m. The Guardian says that figure may overstate what the business is worth today, but it does not reflect the full cost of buying and running it. The Australian Financial Review reported that Hilco Global, the main lender, is owed about $140m and holds a secured position in the process. Any buyer would need to deal with that debt, plus the cost of revitalising the stores. Estimates of the total required run into the hundreds of millions of dollars, and it is not yet clear whether any investor is willing to commit that amount.

Frequently asked questions

Sources

• The Guardian: Crib notes on the decline of David Jones

This article was written with the help of AI from reports by the outlets listed above. See our Editorial Policy. Spotted a mistake? Tell us.