David Jones former chief Paul Zahra claims the department store was not armed to meet the challenges of a new retail environment when he was appointed in 2010.
Zahra revealed the insight at a QUT Business Leaders Lunch in Brisbane.
He said the department store had no digital strategy at the time and was operating on outdated systems.
The rise of international retailers in the market, including Zara and H&M, coupled with the growth of online retailers meant David Jones was ill equiped to compete.
The claims come in the midst of a turnaround strategy by new parent company Woolworths.
Earlier this year, the South African retail group proposed selling off CBD stores in Melbourne and Sydney in a bid to reinvest back into the department store business.
David Jones chairman Ian Moir said there was significant underinvestment in the systems at David Jones at the time.
In a recent investor briefing, Woolworths revealed a number of overhauls at David Jones.
This included utilising the omnichannel fulfilment centre capacity of capability of Country Road Group, also owned by Woolworths.
It also included the adoption of a new CRM programme and a plan to grow online transactions to over 10% of overall sales.
The investment in new systems is part of a broader six-point plan to transform profitability at the department store.