David Jones’s receiver set to close 19 stores

David Jones’s receiver has confirmed it will close 19 of the retailer’s 38 stores.

ABC News has also seen correspondence sent to staff and suppliers confirming the store closures.

The sites affected include a store in Sydney’s Parramatta, three in Victoria and sites on the Gold Coast and Sunshine Coast in Queensland.

Tap here to see the full list of stores to close

David Jones staff were sent a message this afternoon from chief executive Erica Berchtold about the “difficult news”, which said a consultation period was about to begin for affected employees.

The ABC was sent a copy of it.

“I know how much our stores and the people in them mean to all of us, and this is difficult news for our whole business,” Ms Berchtold wrote.

“We all know that the business could not continue operating as it was.

In a letter to suppliers, David Jones said: “We expect the affected stores to continue trading through the peak seasonal period, with closure dates anticipated to occur later in the year.”

Stock at closing stores will be discounted or sent to other locations.

‘Slimline’ David Jones an option

David Jones was placed in voluntary administration less than a week ago.

McGrathNicol was appointed as the voluntary administrator, acting on behalf of all the entities owed cash from its creditors.

Separately,  FTI Consulting has been appointed as the receiver acting on behalf of David Jones’s main secured lender, Hilco.

The collapse of the 188-year-old department store comes after negations with major landlord Westfield broke down, with the retailer’s owner, Scentre Group, confirming David Jones had not paid rent since September in breach of its contracts.

Five outlets in Westfield shopping centres have already been flagged for closure due to them running at a loss, including Parramatta, Hornsby, Woden in Canberra, Carousel in Perth and Southland in Melbourne.

Loading…

Retail analyst Tom Kierath told ABC Business Daily that David Jones had “some wonderful sites”, but it had too many.

He said parties interested in buying the business would likely be eyeing a smaller store footprint.

“I think the interest will be in a handful of sites rather than, necessarily the broader business,” Mr Kierath, head of consumer research at Barrenjoey, said.

“Obviously some of the restructuring that’s going on at the moment … if it does come back, it will come back in a much smaller, slimline version of it current self.”

Mr Kierath said there was a place for a new-look version of David Jones, potentially with a focus on flagship stores with an enhanced offering.

“I think there’s definitely a place for that, and with an enhanced food and beverage offering,” he said.

“People are spending more and more out, and if you can make your stores a desirable place to hang out and spend time and eat and drink, that’s another part of the offer that they can have.

“It probably needs to be reshaped a little bit. Obviously, smaller footprint with a bit more experience as opposed to huge spaces with not many staff.”

Creditors given deadline to submit proof of debts

Administrator McGrathNicol has given David Jones creditors until Monday to submit their proof of debt ahead of its first creditors meeting on Tuesday, which will be held remotely.

The call-out, which was sent with documents late on Tuesday afternoon, is likely to see thousands of small to large businesses come forward with claims, from fashion brands to major landlords.

There are now just days left for other entities to put in expressions of interest to buy David Jones.

McGrathNicol said it intended to lodge an application with the NSW Supreme Court to “extend the convening period, providing additional time to undertake a sale and/or recapitalisation process for David Jones Group”.

It added that if the convening period was extended, the administrators’ report to creditors and the second meeting of creditors would be held at a later date.

ABC News yesterday confirmed that David Jones was up to date with superannuation payments to its 6,000 employees, in line with new pay-day laws that came into effect in July.

Loading…