David Jones, the world's oldest department store still trading under its original name, entered voluntary administration and receivership on Thursday, November 5, after years of mounting losses, the Australian Associated Press (AAP) reported. The chain was founded in Sydney in 1838 by Welsh immigrant David Jones and has traded for 188 years.

Source: AAP

Voluntary administrators McGrathNicol will immediately seek offers for a recapitalisation or the sale of the business, while receivers FTI Consulting run its operations, AAP reported. FTI Consulting's Christopher Hill, one of three FTI executives appointed as receivers and managers, said voluntary administration and receivership would give the retailer 'breathing room' and an opportunity to restructure the business. Stores continue to trade while the process runs.

Source: AAP

The rent dispute that triggered the collapse

The immediate trigger was a breakdown in talks with landlord Scentre Group, which operates Westfield shopping centres, over unpaid rent. Scentre said David Jones had paid rent only through September 30 and was in breach, with stores at 17 Westfield locations, and the Australian Financial Review reported that a proposed rescue plan that would have reduced the retailer's footprint to just 12 stores had unravelled, B&T reported. Chief executive Erica Berchtold, who took over in June, said the company had a 'well-developed plan on how to reset the business for the future' as it worked through the issues with administrators, receivers and its secured lender.

Source: B&T / AFR

David Jones is owned by private-equity firm Anchorage Capital Partners, which bought the chain from South Africa's Woolworths Holdings in a deal completed in 2023, reported at about A$100 million — yaani about A$10 crore. Like other department stores internationally, the high-end chain has struggled in recent years amid the rise of ultra-cheap online shopping and specialty retailers such as Mecca, AAP reported. 'Like many bricks and mortar retailers, David Jones has suffered at the hands of the internet and the competitive forces that can sell the same products as David Jones sells at a cheaper price,' Swinburne governance expert Helen Bird told AAP.

Source: AAP / Retail Gazette

Shoppers grieve an Australian icon

At the six-storey Bourke Street store in Melbourne — the city's longest continuously operating retail establishment, in a building erected in 1911-12 — it was business as usual on Thursday, although one floor featured empty shelves and naked mannequins, AAP reported. Janet Saunders, 73, who has shopped there since she was about 10, said: 'I'd be very sad if they were to close. It would be terrible for Bourke Street Mall.' Committee for Melbourne boss Cath Evans said: 'It is a sad day when the future of such an iconic Melbourne store is now in doubt.' Others remembered the Christmas window displays at the flagship Elizabeth Street store in Sydney, which are up again this year.

Source: AAP

What happens next: the plan is likely to involve closing some of David Jones' stores, threatening many of its 6,000 jobs just weeks before the crucial Christmas trading period, and next steps will be discussed at a creditors' meeting in the coming week, with a date still to be set, AAP reported. For Australia's large Indian and Punjabi community — many of whom work in retail across the country — the sale-or-restructure process McGrathNicol runs will decide how many of the 38 stores, and jobs, survive.