David Jones enters voluntary administration as talks fail

Department store chain David Jones has entered voluntary administration after rescue talks with its biggest landlord, Westfield owner Scentre Group, broke down.

Voluntary administration is a process where an independent insolvency expert, known as an administrator, takes control of a company's operations to assess its financial position and work out the best way forward.

The retailer had not paid rent to Scentre Group since September, putting it in breach of its lease agreements.

Here is what you need to know.

David Jones was founded in 1838 and is the world’s oldest continuously operating department store still trading under its original name.

Anchorage Capital has owned the retailer since 2023.

The retailer has 39 stores across Australia and New Zealand and employs about 5,600 people.

David Jones recorded a $95.5 million loss in the 2024-25 financial year.

Its sales also fell 8.7% to about $2 billion.

It spent $125 million on rent and leases, and $153 million on financing costs, including interest.

Last month, Hilco reportedly provided an extra $10 million on top of its existing loan so the retailer could buy stock for Christmas.

The department store chain is facing pressure from online shopping and discount retailers.

Some brands have also been pulling back.

Country Road Group will reportedly pull nearly 100 of its 283 in-store concessions out of David Jones stores.

Last week, Anchorage confirmed it was in talks with landlords to secure the retailer’s future before Christmas.

Reports said the plan involved closing more than half its stores.

The key negotiation was with Scentre Group, which owns the Westfield shopping centres.

David Jones has 17 stores located in Westfields.

Talks between the two have now ended, with each side reportedly rejecting the other’s offer.

Negotiations

On Wednesday, Scentre Group told the ASX that David Jones had paid rent for its Westfield stores up to 30 September.

Scentre Group CEO Elliott Rusanow said the retailer had not made its lease payments since then and was in breach of its agreements.

He said David Jones owner Anchorage had rejected a “generous offer” to keep the department store chain trading.

What it means

David Jones stores are expected to continue trading while the administrators assess the business and its future.

Administrators have not yet confirmed whether gift cards, returns or David Jones Rewards points will be honoured.

FTI Consulting, which has been appointed as receiver, will oversee the business during the restructuring and sale process.

An update on potential store closures and job losses is expected later this week.