David Jones administrators reveal six month financial review before collapse
New details show the struggling department store group discussed restructuring with advisers months before entering voluntary administration.
By Hassan Ellis ·
Administrators for the David Jones department store group have disclosed that they conducted a detailed review of the company's finances six months prior to its recent collapse. The firm also noted that discussions regarding a potential restructuring of the retailer took place three months before the business was placed into voluntary administration. This newly revealed timeline has prompted scrutiny of the group's strategic decisions during that period.
The disclosures raise significant questions about why the department store continued to purchase new stock and allowed payments to some brand suppliers to fall months behind before finally revealing its inability to meet its debts last Thursday. The extended period of financial difficulty suggests a prolonged attempt to manage the company's liquidity before the final decision to seek external administration was made.
The administrative process is expected to result in substantial losses for unsecured creditors. Among those at the highest risk of not being paid in full are unpaid product suppliers and shoppers who hold unredeemed gift vouchers. The administrators have confirmed that the group's financial obligations extend to various parties, including employees and landlords, all of whom are now part of the creditor group.
McGrathNicol, the firm appointed to manage the administration, sent its first circular to creditors on Tuesday. This document invited all stakeholders to a meeting scheduled for 17 November. The letter outlines the timeline of events leading up to the administration and details the immediate steps being taken to manage the company's assets and liabilities.
The administrators stated that they were engaged by the lawyers representing Anchorage Capital, the owner of David Jones, as early as April 2026. Their initial role was to analyze specific financial information regarding the department store group. However, McGrathNicol clarified that during this early phase, they did not directly advise the group on its operations nor did they conduct a formal review of its solvency or ability to pay debts.
By July of this year, the situation had escalated. Simon Woodhouse, the group director of David Jones, met with McGrathNicol and Hilco, the company's largest lender. The purpose of this meeting was to discuss the retailer's financial performance and explore the possibility of a restructuring. The participants intended to form a working group to regularly address the emerging issues, although this group was never formally established.
According to the administrators, Woodhouse left the July meeting when the topic of potential restructuring was raised. During this same period, David Jones was implementing tiered and extended payment terms for smaller suppliers. Several businesses reported that brands were forced to accept deeper discounts in exchange for faster payment, a tactic used to manage cash flow.
McGrathNicol indicated that there was no further discussion regarding the company's dire financial position until 22 October. On that date, Woodhouse requested their assistance in planning for a potential voluntary administration. Following this request, Woodhouse and other key figures held five additional meetings over the next two weeks.
The final stages of the process involved a series of briefings held last Wednesday, the day before the administration was officially announced. During this time, the company was actively negotiating with its landlords and preparing for the transition. McGrathNicol received an upfront payment of one million dollars on that day to begin the administration process. The firm informed creditors that it anticipated accessing an additional three to four million dollars in funding to support the process.
The first formal meeting with creditors will be held on 17 November. A second meeting is typically required six weeks later, but McGrathNicol has applied to delay this to early April 2027. This extension is intended to provide the administrators with more time to either sell the business or raise additional funds. While the initial letter did not specify how long the company had been insolvent, the administrators have asked the directors to prepare a comprehensive report on the business, property, and financial circumstances. FTI Consulting, which manages the day-to-day operations, stated on Monday that the company remains fully operational. Anchorage Capital, David Jones, and Hilco were contacted for comment on Tuesday night.
