Department store David Jones has responded to concerns from the market over delays in payments to suppliers, with a spokesperson saying that the retailer has been streamlining its operational and financial process.
This came after data from commercial credit agency CreditorWatch showed that David Jones has been paying its suppliers an average 16 days overdue compared to the industry average of seven days overdue. Despite that, the agency did note that David Jones is at a low risk of default.
In its statement, a David Jones spokesperson said it values its brand partner relationships and the role they play in driving mutual growth.
The spokesperson added that under its Vision 2025+ strategy, the department store has successfully delivered a $250 million transformation program across every part of the business “on time and within budget”.
This includes major store refurbishments, the launch of a mobile app, the evolution of its e-commerce platform and the launch of a new loyalty program.
“Customers are already seeing the benefits of these initiatives, which lay the foundation for long-term growth and shared success,” the spokesperson said.
“As part of this transformation, we are streamlining our operational and financial processes to build a stronger, more efficient, and more sustainable business model. This includes implementing a new supplier payment process within our Oracle finance system, enhancing our Purchase Order procedures, and updating our standard payment terms to reflect these improvements and enable continued investment in growth and innovation.”
Many of its major partners have reportedly already agreed to the streamlined payments approach, with further discussions underway.
According to multiple media reports, David Jones’ latest filings to ASIC confirm the retailer had a net loss of $74.4 million in the FY24 financial year, with gross sales hitting $2.2 billion.
The department store had also recorded a 'bullet loan' of $26.3 million, which was due to be paid in September 2024.
Another loan was for $150 million to fund working capital, which matures on March 27 next week, with media reports also noting David Jones had extended payment times to its suppliers.
Earlier this year, David Jones introduced over 40 new international and Australian designers across womenswear, menswear, footwear and accessories. This adds to over 800 brands stocked at the department store, through stores and/or online.
All this comes amid growing concerns globally over the department store model, following collapses by prominent retailers globally such as Saks, Neiman Marcus and Bergdorf in the United States early this year, Smith & Caughey’s in New Zealand last year, and the closing of all stores by Debenhams in the United Kingdom.
David Jones and its competitor Myer in Australia and New Zealand have been diversifying into different income streams in recent years, with David Jones scaling a retail media arm called Amplify, while Myer is tapping into B2B loyalty deals and a new marketplace offering.
David Jones has also been reworking some of its store locations, and updated its online platform and its mobile app.
More recently, Myer did strike a merger deal with Premier Investments to snap up its five apparel brands, Just Jeans, Jay Jays, Jacqui E, Dotti and Portmans.
Myer, as a group, is publicly listed on the Australian Securities Exchange, while David Jones is owned by Anchorage Capital Partners.
According to a media release late last month from CreditorWatch, late and overdue payments remain a persistent and costly problem for Australian businesses, with new research revealing they are placing significant strain on cash flow, decision making and personal wellbeing across the economy.
The agency's Business Sentiment Survey of more than 1,000 Australian business decision‑makers showed 17 per cent of businesses now rate late payments as one of the top risks to their profitability, while four in five (80 per cent) have experienced late or overdue payments in the past 12 months.
More than two‑thirds of respondents (68 per cent) said up to 30 per cent of the invoices they issue are paid late, with payment delays averaging 25 days beyond agreed terms. Sole traders typically experience invoices overdue by around 14 days, while small and medium‑sized businesses most commonly report delays of between 15 and 29 days.
Ninety‑four per cent of businesses with 200 or more employees reported dealing with late or overdue payments in the past year.
The survey findings mirror trends identified in CreditorWatch’s latest Business Risk Index, which shows that, while insolvencies eased temporarily in 2025, momentum has shifted with renewed pressure evident across several sectors.
Trade payment defaults and overdue invoices – a critical early‑warning indicator tracked in the Business Risk Index – have also deteriorated again, returning in January close to previous highs.