David Jones placed into administration, receivers to oversee store closures and restructuring
The historic Australian retailer David Jones has entered voluntary administration and receivership, with plans to restructure the business, close several stores and potentially lay off staff before the holiday season.
David Jones has been handed over to voluntary administrators from McGrathNicol and receivers from FTI Consulting as the company seeks to restructure and find a buyer. The board’s decision was communicated to staff early this morning, and the receivers will manage the holding company while the retailer’s physical and online stores continue to operate.
Chief executive Erica Berchtold said the company has a plan to reset the business for the future and will work with the administrators, receivers and secured lender. FTI’s Christopher Hill noted that the current retail environment, rising costs, an outdated store footprint and supply-chain challenges have contributed to the situation, and that administration provides breathing space for a restructuring process.
A transaction process to secure recapitalisation or a sale as a going concern will begin immediately under the direction of the administrators. Financial-services firm MST Marquee identified several stores across New South Wales, Queensland, South Australia, Victoria and Western Australia as highly likely to close.
The collapse follows a failed negotiation between David Jones’ private-equity owners and shopping-centre landlord Scentre Group over rent and store closures. Scentre’s chief executive Elliott Rusanow said David Jones had not paid rent since October and that a proposed offer to Anchorage Capital Partners was rejected.