Currently, David Jones is still trading. Its doors are open, its website is live, and its Christmas stock is on the floor. Even its Christmas windows with Disney are on full show.
But for the first time in its 188-year history, the business answers to receivers rather than its owner.
The department store's directors this week appointed Jason Preston, Shaun Fraser, Jacinta Nielsen and Matthew Hutton of McGrathNicol as voluntary administrators. At the same time, secured lender Hilco Capital appointed Christopher Hill, David McGrath and Joanne Dunn of FTI Consulting as receivers and managers of ACP Riley Street Midco Pty Ltd, the parent company of David Jones Pty Limited.
In New Zealand, David McGrath and Joseph Hansell of FTI Consulting are receivers, with Andrew Grenfell and Kare Johnstone of McGrathNicol as voluntary administrators.
McGrathNicol is now seeking offers for a recapitalisation of the business or a sale as a going concern. Hill at FTI Consulting puts the collapse down to the current trading environment, rising costs, a significant and outdated retail footprint, and supply chain challenges.
"Voluntary administration and receivership provides breathing space and an opportunity to restructure the business," Hill says. "We will manage this process carefully, mindful of the impact on some stakeholders but also recognising the need for difficult decisions."
CEO Erica Berchtold says management has a well-developed plan to reset the business and will work with the administrators, the receivers and the secured lender to pursue it.
What that reset looks like, how many stores it leaves standing and who carries the cost of getting there are now the questions facing the business, its suppliers, its landlords and its staff.
Up until now
Bill Rooney, founder of 6one5 Retail Consulting, believes the challenges were hitting long before Anchorage Capital Partners bought the business from Woolworths Holdings South Africa for $100 million in December 2023. In 2015, the department store was acquired by the SA company for $2.1 billion.
Rooney's list of pain points starts with long-term leases on big boxes that left no room to exit unprofitable stores. Over the same period, the market was rewritten by the aftermath of the GFC, the eCommerce boom, fast fashion, the Kmart model, COVID and the cost-of-living squeeze. Uniqlo now turns over around $820 million in Australia and Zara around $410 million.
Anchorage had injected $250 million into upgrading the business since its acquisition. Days before the appointment, an Anchorage spokesperson told Ragtrader the firm remained committed to the business.
"Anchorage Capital Partners continues to support the Company through a prolonged period of weak consumer confidence and significant structural change across the department store sector and has committed substantial capital and supporting investment in the business' transformation," the spokesperson said.
But losses deepened. David Jones posted a pre-tax loss of $95.5 million for FY25, up from $74.1 million the year before, as total sales slipped 8.7 per cent to $2 billion. It has not lodged its FY26 accounts with ASIC, missing the October 30 deadline, with auditor PwC yet to sign off.
The lender's hand
According to media reports, David Jones breached a covenant in its original $230 million facility with Hilco. The lender has since confirmed to Ragtrader that it funded above the agreed facility, with funding valued at $10 million, so the retailer could build stock ahead of Black Friday and Christmas.
Lindsay Bainbridge, partner at Pitcher Partners Melbourne, says the timing may have been deliberate. Bainbridge was voluntary administrator for Betts, which recently secured creditor approval for a deal that would see the founding family retain control of the 134-year-old shoe business. He was also voluntary administrator for Jeanswest, which saw former owners take back control.
"The investment in Christmas stock suggests there may have been a deliberate strategy to keep the business trading through its busiest period, even as its financial position deteriorated," Bainbridge says.
"Allowing a retailer to trade through November and December provides an opportunity to generate revenue, sell seasonal stock at normal retail prices and potentially improve the recovery of outstanding debts."
A Hilco Capital spokesperson says the asset-backed lender supported David Jones through increased funding and flexibility so Anchorage and management could explore a range of options they considered critical.
"Ultimately, the directors of David Jones and its owners, Anchorage Capital Partners, have been unsuccessful in their negotiations and have appointed voluntary administrators to the business," the spokesperson says.
"Following this, we have exercised our right as a secured creditor to appoint receivers and managers. We acknowledge the significant impact on employees and this iconic, much-loved 188-year-old Australian brand. We will continue to support the David Jones business to keep trading while it is recapitalised and new owners are found."
The landlords
Talks with landlords dominated the final weeks before the appointment. According to reports, David Jones offered its major landlords a stake in the business in exchange for access to about $70 million held in rental bonds, and sought their approval to close at least half its stores. Up to 26 of its 38 stores have been tipped to close, with the retailer reportedly weighing a network of between 12 and 20. Westfield stores at Parramatta, Hornsby, Southland, Woden and Carousel are reportedly in focus. David Jones and Anchorage declined to comment on the store closure reports.
Westfield owner Scentre Group is the largest landlord. David Jones occupies about 200,000 square metres across 17 Westfield centres. Scentre's share of gross rent from those stores in calendar 2026 is $45 million, or $352 per square metre, against an average of $942 per square metre across its portfolio.
These stores account for about 1.8 per cent of Scentre's gross rent and about 3.6 per cent of its funds from operations. Scentre holds about $30 million in bank guarantees, equal to eight months of gross rent, which were a condition of its approval of the Anchorage acquisition. It reported David Jones had paid all rent up to September 30.
Vicinity Centres claims it is owed about $2.2 million in unpaid rent across four stores, which contribute about $34 million, or 2.4 per cent, of its gross rental income. Vicinity noted its stores at Chadstone, Chatswood Chase and QueensPlaza rank among the retailer's most productive, with lease expiries ranging from 2029 at Chadstone to 2041 at Chatswood Chase. It has put its FY27 guidance under review, and noted it maintains contingency plans for each of its David Jones locations.
The broader category data offers little comfort. Vicinity reported a 6.5 per cent drop in department store sales in the first quarter of FY27, the fourth consecutive quarterly decline. Department store sales across Westfield centres fell 3 per cent in the three months to June 30.
For Bainbridge, leases are one of the clearest markers of whether a brand comes out the other side of a voluntary administration.
"Hostility from a key supplier or secured creditor, expired leases or those operating on month-to-month arrangements, and losses across all, or too many of, their stores, are all indicators that a company won't survive," he says.
The suppliers
The brand exodus began well before this week. Country Road Group plans to cut nearly 100 of its more than 280 concessions across David Jones from early 2027, covering Country Road, Witchery, Mimco, Trenery and Politix. Accent Group stopped supplying the department store in July, while labels including Acler, Effie Kats, Significant Other and Aston Studio have moved to exclusive arrangements with Myer.
David Jones also fielded delayed supplier payments earlier this year, with multiple reports indicating some suppliers are still seeing delays.
Rooney sees the supplier retreat as partly a David Jones issue and partly a market one. Country Road Group's retreat also comes after the end of the sister-company relationship once Woolworths SA sold the business.
"Under a concession model the supplier carries the stock and staff, so it can reallocate quickly," he says.
For brands still shipping, Bainbridge says the law draws a clear line between stock supplied before and after the appointment.
"The Corporations Act makes a VA or receiver personally liable for new stock they cause the company to order from a supplier," he says. "Suppliers face uncertainty for the recovery of stock provided prior to the VA appointment until the end of the process, but they can have confidence of being paid for new stock ordered at the request of a VA or receiver."
RMIT University associate professor Carol Tan, program manager of RMIT's Master of Fashion (Entrepreneurship), advises brands wholesaling or operating concessions to map their exposure. That means reviewing payment terms, inventory commitments, future orders and receivables, and having alternative routes to market ready.
"Department stores remain important partners, particularly for customer acquisition and visibility, but the strongest brands tend to have multiple routes to market," Tan says.
Staff and customers
David Jones employs around 6,000 people. Dr Tamara Wilkinson, senior lecturer in the Faculty of Law at Monash University, says the dual appointment raises questions about how and when they will be paid wages, superannuation and outstanding leave entitlements.
"Customers holding gift cards are also likely wondering whether these will be honoured," Wilkinson says. "Australian insolvency law protects employees, suppliers and other creditors of a company, including customers with gift cards, but cannot guarantee there will always be enough money to pay them."
The receivership changes the order of payment.
"Because a receiver has been appointed over David Jones' holding company by the corporate group's secured creditor, it is likely that the secured creditor will receive some payment before employees or other creditors," Wilkinson says. "Whether employees get paid, and how much they receive, depends in part on which company assets are available and whether those assets are covered by the lender's security."
Australian Retail Council CEO Chris Rodwell says the impact reaches well beyond the store's own workforce, to the brands, suppliers and local businesses it supports. He frames the collapse as part of a wider squeeze on the sector, pointing to rising lease, transport, supply chain, energy and wage costs, along with government taxes, charges and regulation, stretched household budgets, retail crime and ultra-low-cost global platforms.
"In entering voluntary administration, it has the opportunity to reshape its operations so it can play a part in Australia's retail future," Rodwell says.
"The pressures facing Australian retail are not new and we have been sounding the alarm for some time around the challenges Australian retailers are facing. While retailers are incredibly resilient, they need greater action from government to bring down costs and reduce unnecessary red tape."
What survives
Bainbridge says brands and retailers that come through a voluntary administration share a few traits. They have enough cash to keep trading, or a first-ranking secured creditor willing to fund the administrator, and they have some stores that make a profit.
"A successful VA process includes decisive action to cut away unprofitable stores," he says. "They have a strong, recognisable brand, a good online store and connection to customers, and suppliers that will support the administrators trading the business on through the VA process."
Rooney believes a viable David Jones exists, but claims it will be much smaller and genuinely premium. He predicts around a dozen stores on short or flexible leases, built around CBD and major hub locations. He also projects a shift to categories, with beauty and fragrance run as a managed category rather than brand by brand, alongside luxury and premium fashion, accessories, occasion and bridal, the food hall, gifting and premium home. Commodity apparel, basics, general homewares and electrical should go, in his opinion.
"Kmart, Uniqlo and online win there," Rooney says.
The flagships would fulfil a strong online business, backed by a loyalty program built around customer data, he says.
Tan agrees a smaller footprint need not be a weakness, provided the remaining stores deliver a consistent experience. She points to lean international networks, with Selfridges trading from four UK stores and Shinsegae running around a dozen department stores in South Korea. By comparison, David Jones operates 38 stores across Australia and New Zealand.
"In some cases, a smaller and more productive store network can actually strengthen a retailer," Tan says.
She also sees a shift in the department store's role for emerging Australian designers, from stocking established labels to hosting pop-ups, brand residencies and founder events that give shoppers a reason to visit.
"The role of the department store is shifting from being a gatekeeper to being a platform," she says.
Rooney's lessons for other mid-to-premium retailers are clear. Short leases with exit and turnover clauses beat scale. Customer data, loyalty and online fulfilment are not optional extras. Traffic-driving categories need to be run deliberately rather than by default through concessions.
Above all, he says, retailers need to move before the crisis. For David Jones, that window has closed. What remains to be seen is whether there is enough of the business, and enough goodwill among landlords and suppliers, left to build a likely smaller department store on the other side.