David Jones to close half its stores triggering mass job losses under ‘urgent restructure’

David Jones, Australia's oldest department store, has announced it will shutter half of its stores as part of an urgent restructuring, leading to significant job losses, according to receivers FTI Consulting. The retailer employs over 6,000 staff across 38 stores. FTI stated that it would initiate an immediate consultation process for all staff associated with 19 stores set for closure.

While these stores will continue trading for the time being, closures are anticipated by the end of the year. The affected stores span New South Wales, Victoria, Western Australia, Queensland, South Australia, the Australian Capital Territory, and New Zealand. Under a dual appointment, FTI manages daily operations, while administrators McGrathNicol search for a buyer or additional capital.

The restructuring comes after years of financial struggles, with the retailer failing to establish a profitable niche in a sector disrupted by online competition and standalone upmarket stores. David Jones' CEO, Erica Berchtold, informed suppliers that the store portfolio was no longer suitable for the business, emphasizing the need for a financially sustainable network.

Hilco Global, David Jones' primary secured lender, plays a crucial role in the retailer's future, having appointed FTI to safeguard its financial interests. Hilco will deploy representatives in the stores slated for closure to boost sales and promotional efforts. Administrators revealed they had reviewed the privately-owned department chain's finances prior to its administration, and some suppliers are owed money dating back to April.

Private equity owner Anchorage Capital aims to slim down David Jones, free from underperforming leases. Anchorage is expected to propose re-purchasing the storied 188-year-old chain to administrators. The stores to be closed include several in New South Wales, Victoria, Western Australia, Queensland, South Australia, the ACT, New Zealand, and Woden, ACT, as well as David Jones' sole New Zealand store in Auckland.