David Jones to close 19 stores in urgent restructuring
Receivers have announced the closure of half the department store chain's locations, putting over 6,000 jobs at risk as the retailer seeks new capital.
By Hiroshi Ferrari ·
The Australian department store chain David Jones is preparing to shut down half of its physical retail network, a move that will result in significant job losses under an urgent restructuring plan. FTI Consulting, which has been appointed as receiver, confirmed the decision on Wednesday, marking a major shift in the company's operational strategy.
The retailer currently employs more than 6,000 staff across 38 stores. In a formal statement, FTI indicated that it is proceeding with an immediate restructure of the business. As part of this process, receivers have begun consultations with all employees associated with the 19 specific stores identified for closure.
Although the affected locations will continue to trade in the immediate term, FTI stated that there is no final date set for the closures. However, the company anticipates that these stores will cease trading by the end of the year. This timeline provides a brief window for staff and customers to adjust to the impending changes.
The current management structure involves a dual appointment. FTI holds day-to-day control over operations, while administrators McGrathNicol are tasked with finding a buyer or securing a fresh injection of capital to stabilize the business. This collaborative approach aims to address the financial instability that has plagued the retailer.
This restructuring follows years of steep financial losses. The department store failed to establish a profitable niche in a market that has been heavily disrupted by online competitors and independent upmarket stores. The pressure from these shifting consumer trends contributed to the company's decision to enter voluntary administration last week.
Documents released late on Tuesday revealed that administrators had been reviewing the finances of the private equity-owned chain for months before it collapsed into administration. The reports highlighted that some small suppliers were owed money for stock sent as early as April, which was well before the company missed rent payments and formally entered administration.
The chain's private equity owner, Anchorage Capital, has long sought a slimmer version of David Jones. Their strategy involves freeing the company from long-term leases on underperforming sites. It is expected that Anchorage Capital will soon make a proposal to the administrators to re-purchase the 188-year-old chain.
The list of stores slated for closure includes locations across several Australian states and in New Zealand. In Western Australia, the Carousel and Garden City stores will close, along with Hay Street Mall. In Victoria, the affected sites are Glen Waverley, Highpoint, and Malvern Central.
New South Wales will see the most closures, with stores in Green Hills, Hornsby, Macarthur Square, Macquarie Centre, Parramatta, Warringah Mall, and Wollongong Central set to shut down. Queensland locations at Robina Town Centre and Sunshine Plaza, along with the Newmarket store in New Zealand, are also included in the list.
Additionally, the closure list includes the Marion and West Lakes stores in South Australia, as well as the Woden store in the Australian Capital Territory. These closures represent a significant contraction of the brand's physical footprint across the region.
