Australian suppliers hit as David Jones enters administration
David Jones went into voluntary administration, leaving dozens of small Australian businesses with unpaid stock and prompting store closures and job losses.
Multiple Australian suppliers said they were left with unpaid stock after David Jones entered voluntary administration on Thursday. Porter Jewellery in Bondi reported sending $50,000 of merchandise to the retailer on the morning the news broke and attempted to retrieve the deliveries. The founders posted a video on social media describing the day as "very sad for many small businesses."
Chloe Barry, co-owner of K Juliet, said the collapse jeopardised her brand, which had just been added to the department-store lineup. > "Our small business actually launched into David Jones a few weeks ago. It was a massive dream of ours to launch with a major retailer in Australia. We are super sad, very disheartened and incredibly stressed," she told Today. Barry added that David Jones had paid only a quarter of the first purchase order, leaving her with a large amount of unsold inventory and significant financial exposure.
In response, David Jones chief executive Erica Berchtold said the physical and online stores would continue to operate under the control of receivers while a restructuring plan is developed. > "David Jones is an iconic company and so many Australians have stories and memories of visiting DJ’s stores. I thank customers, our team members and our partners for their continued support through this period," she said.
FTI Consulting partners Christopher Hill, David McGrath and Joanne Dunn have been appointed receivers and will manage the business until it is restructured and sold. Hill said voluntary administration provides "breathing space" to address the challenging retail environment, rising costs, an outdated store footprint and supply-chain issues.
The announcement triggered footage of clothing racks being removed from stores and suppliers pulling products to limit exposure. Analysts expect multiple store closures and hundreds of job losses before Christmas, with the 17 Westfield locations identified as the first likely to close. A spokesperson for Scentre Group, the parent of Westfield, said Anchorage Capital Partners, the owners of David Jones, had not paid rent for those locations since September and had rejected a "generous" offer prior to the administration filing.