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Australia's Oldest Department Store David Jones Enters Administration
Confirmed
In Short: David Jones, Australia's oldest department store, has entered voluntary administration, putting thousands of jobs at risk.
David Jones, Australia's oldest department store chain, has entered voluntary administration, putting thousands of jobs at risk. The company, which has operated for 188 years, employs about 6,000 staff and has 38 physical stores, with 17 located in Westfield shopping centers.
According to voluntary administrators McGrathNicol, the company's physical and online stores will continue to operate while receivers FTI Consulting review the business. FTI Consulting will take day-to-day control of operations, running the department store network while it restructures the business.
The decision to enter administration came after the company failed to pay its rent for October, putting it in breach of its tenancy agreement with Scentre, which owns Westfield.
CEO Erica Berthold said, “David Jones is an iconic company and so many Australians have stores and memories of visiting DJ’s stores and I think customers, our team members and our partners for their continued support for David Jones through this period.”
The administration process will almost certainly trigger immediate store closures, though receivers will try to keep the core network open while hunting for fresh capital. Analysts suggest that a smaller model may be necessary for the company to rebuild and recover.
David Jones’ larger Australian rival, Myer, announced in September it had lost $276 million last financial year, its second-worst year in 126 years of operation. Competitive pressures have intensified, with online-only retailers like Amazon and Shein capturing price-sensitive demand, while specialist players like Mecca have responded more quickly to shifting consumer preferences.
For many Australians, David Jones represented luxury and was a place to see and be a part of the glitz and glamour. The brand has a storied history, with Queen Elizabeth II attending a banquet dinner on the seventh floor of the Elizabeth St store during her first visit to Sydney in 1954.
However, in recent years, the brand had lost its shine, with suburban stores lacking excitement and glitz. The collapse of David Jones signals the 'death knell' for the department store format, according to Jana Bowden, who teaches marketing at Macquarie University's Business School.
The Rundle Mall store at Adelaide Central Plaza is famous for its Magic Cave that opens when Father Christmas arrives after the National Christmas Pageant on November 14. The administration could leave unsecured creditors with substantial losses, with shoppers holding unredeemed gift vouchers most at risk.
What this adds
The administration process will likely lead to immediate store closures, though efforts will be made to maintain the core network while seeking new capital. Analysts suggest a smaller model may be necessary for the company to rebuild and recover.
What's confirmed
- “David Jones is an iconic company and so many Australians have stores and memories of visiting DJ’s stores and I think customers, our team members and our partners for their continued support for David Jones through this period,” David Jones CEO Erica Berchtold said.
What's still developing
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- In the US, Macy’s began closing 150 stores this year to focus on higher-performing flagship locations, while in Germany, dominant department store operator Galeria Karstadt Kaufhof has shut dozens of outlets.
- “We do not want to see the end of David Jones, so perhaps it is a smaller model that then rebuilds and goes from there,” Dwyer said.
- Australian teen Noah Jones is no longer a plaintiff in the case but will attend Tuesday's hearing Two days of hearings on a challenge to Australia's landmark social media ban for children will begin at the country's highest court on Tuesday.
- The company said it shared Australia's goal of protecting young people online "but there are better and more effective ways" than a ban.
- "The city stores have retained their upper end airs and graces, but the suburban stores leave a lot to be desired – they're mundane, they lack excitement and there's definitely no glitz," she said.