Australia’s 188-year-old retailer David Jones enters administration, faces sale
SYDNEY, Nov 5 (Reuters) - Australia's 188-year-old department store chain, David Jones, was placed into voluntary administration on Thursday, as rising costs, sluggish retail sales and supply chain pressures weighed on its business.
David Jones, Australia's 188-year-old department store chain, has entered voluntary administration amid rising costs, declining retail sales, and supply chain pressures, according to Reuters. The company, founded by Welsh immigrant David Jones in Sydney in 1838, is one of the world's oldest continuously operating department stores. Operated by about 6,000 employees across 38 stores in Australia and New Zealand, David Jones is a highly recognizable brand, predating Harrods in London by over a decade.
McGrathNicol has been appointed as the voluntary administrators, and a transaction process seeking offers for recapitalization or sale as a going concern will begin immediately. The process, managed by McGrathNicol, FTI Consulting, and McGrathNicol, aims to carefully navigate the potential impact on stakeholders while making necessary decisions.
Founded in 1838, David Jones offers clothing and accessories for significant life events, including formal wear, school attire, and graduation garments. Despite its long history and popularity, the retailer has faced challenges over the past decade due to the rise of online shopping and competition from fast-fashion chains. Anchorage Capital Partners, the retailer's most recent owner, acquired David Jones from South African retailer Woolworths in 2022 for approximately A$100 million.
David Jones CEO Erica Berchtold stated that the company has a well-developed plan to reset the business in the future. She added that the company would collaborate with administrators, receivers, and its secured lender during the voluntary administration process, which is akin to Chapter 11 bankruptcy in the United States.
Luxury US department store owner Saks Global recently emerged from Chapter 11 after nearly five months, closing fewer than half of its previous stores and reducing its debt to a quarter of its previous amount. However, David Jones's management rejected an offer from Scentre Group, which owns and operates Westfield shopping centers in Australia and New Zealand. Scentre Group CEO Elliott Rusanow informed the Australian Securities Exchange about the rejected offer on Wednesday.
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