The owners of David Jones are in urgent discussions with landlords and suppliers to determine the department store’s future beyond Christmas this year.
The discussions are part of intense efforts by private equity owner Anchorage Capital to turn around the upmarket department store amid mounting cash-flow issues, and at a time when cost-of-living pressures are constraining consumers.
David Jones lender and distressed business investor Hilco Capital confirmed it has provided funding to David Jones to see it through December, traditionally the most crucial time of the year for department stores, when they can make up two-thirds of their annual profits.
“Hilco Capital has funded above the agreed facility to allow David Jones to increase stock holdings ahead of the busy Christmas trade and sales period,” a spokesperson said. “Hilco remains supportive of the business, and any inference otherwise is false.”
An Anchorage Capital spokesperson said company directors were in “intense” active discussions to make a decision by Christmas on what the long-term future and size of the department-store business would look like beyond the holiday period, which could involve some store closures.
Hilco’s cash injection will go towards paying commercial rent on its 40 stores and paying suppliers for stock, and allow David Jones to draw down on its loan facilities, which are linked to inventory.
David Jones has breached a minor covenant, The Australian Financial Review reported yesterday, a condition that gives lender Hilco the right to seize control of the business. A spokesperson for Anchorage Capital rejected reports that McGrathNicol had been appointed as a restructuring adviser.
Several Australian luxury and designer brands have fled David Jones recently and found refuge at rival Myer, which is showcasing trendier brands more attractive to younger customers after pushing suppliers towards longer payment terms.
Australian designer labels Effie Kats, South Australian-founded Acler, Significant Other and Aston Studio left their contracts with David Jones to sign exclusively with Myer, while iconic luxury boot maker R. M. Williams ended its relationship with David Jones nine months ago.
LVMH-owned Dior, Gucci and Chanel have pulled some product lines from the 188-year-old retailer, while Country Road Group, which operates the Witchery, Mimco, Politix and Treney brands, has axed nearly 100 of its 283 concession stores across David Jones’ network.
David Jones has downsized its footprint over the past few years and given entire floors back to landlords.
Erica Berchtold, who became the retailer’s first female chief executive after being appointed to lead the business in late June, is working on a turnaround for the business, according to a company spokesperson.
Meanwhile, shoppers on online discussion platform Reddit are encouraging each other to use their David Jones gift cards. “The word around the campfire is that if you have a gift card balance, use it ASAP,” said user Illustrious_Error469.
David Jones has been unprofitable for years, booking $95.5 million in losses in the year to June 29, deepening losses from the prior year of $74.1 million. Mid-market rival Myer, which operates 57 stores across the country, is also struggling for profitability, recording losses of $276.5 million in the 2026 financial year.
Department stores all around the world are fighting to stay relevant with modern shoppers, who are turning to standalone brands and shopping online instead.
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