Australia's 188-year-old department store chain goes into administration
David Jones, Australia's oldest department store chain, has entered voluntary administration, the country's closest equivalent to Chapter 11 bankruptcy in the U.S.
Australia's 188-year-old department store chain, David Jones, has entered administration amid financial struggles. The legacy retailer joins other Australian firms that have restructured or closed due to mounting costs and a slowing economy. David Jones will continue to operate under the control of receivers from FTI Consulting, while McGrathNicol has been appointed as voluntary administrators.
They have initiated a transaction process seeking offers for recapitalization or sale as a going concern, with the firm managing the process. Founded in Sydney in 1838 by Welsh immigrant David Jones, the retailer is the world's oldest continuously operating department store with approximately 6,000 employees across 38 stores in Australia and New Zealand.
Despite its storied history, the brand has faced challenges for over a decade, primarily due to the shift towards online shopping and intense competition from fast-fashion chains. CEO Erica Berchtold stated the company would work with administrators, receivers, and secured lenders during the voluntary administration process. Luxury US retailer Saks Global emerged from Chapter 11 bankruptcy earlier this year, while Australian property owner Scentre Group offered a lifeline to David Jones but was rejected by Anchorage Capital, the chain's current owner.
National Australia Bank recently reported a significant drop in annual profits, warning of a growing risk of recession. Meanwhile, energy giant Woodside abandoned its dividend policy and announced plans to cut over 500 jobs.
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