David Jones is reportedly seeking to finalise a multi-million-dollar refinancing deal which comes as the department store navigates supplier payment delays.
The Australian reported this week that David Jones is about to finalise a refinancing deal to keep the business in operation, with its sources indicating that the deal is valued at around $150 million.
Ragtrader reached out to David Jones for comment, which it declined to offer.
This comes after the retailer updated its payment terms for suppliers, with recent data from CreditorWatch showing David Jones' supplier payments are overdue on average by up to 16 days. This is 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 a statement on the supplier payment delays, a David Jones spokesperson told Ragtrader two weeks ago that 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.”
These challenges at David Jones follow shakeups by department stores globally. Saks over in the United States collapsed into bankruptcy earlier this year. Debenhams in the United Kingdom wound-up its store portfolio during the COVID-19 pandemic. Smith & Caughey's in New Zealand closed its doors last year. Many have also trimmed down portfolios in recent years, including Nordstrom closing its Canada stores.