Failed Australian chain David Jones to close half its stores

Résumé détaillé

In an overhaul aimed at saving the business.

Australian retailer David Jones will close half its department stores by the end of the year in an overhaul aimed at saving the business.

The 19 stores earmarked for closure will leave a swathe of empty floor space at commercial landlords across Australia, including malls owned by Stockland, Vicinity and Scentre Group, during a key holiday period for retailers.

“The steps are unavoidable if David Jones is to continue as a viable business,” the chain’s receivers, FTI Consulting, said in a statement Wednesday.

Australia’s oldest department store chain collapsed last week, almost 200 years after it was founded in Sydney. Administrators at McGrathNicol are seeking a buyer or fresh funds for David Jones.

The stores to be axed include Green Hills near Newcastle, a site currently leased from Stockland, as well as those in Parramatta and Warringah Mall, both at Westfield-branded malls run by Scentre. The store in Glen Waverley in Melbourne, leased from Vicinity, will also close.

Scentre said last week that David Jones has space at 17 Westfield centres and had paid rent only to September 30.

As David Jones fell into administration, Chief Executive Officer Erica Berchtold said there was a “well-developed plan on how to reset the business.” Wednesday’s restructure is in line with that overhaul, according to FTI Consulting.

Still, the ultimate fate of David Jones may not be known until well into next year. McGrathNicol has said it will seek court approval for as many as three additional months to pursue a sale or recapitalisation of the retailer.

The first meeting of David Jones’ creditors is scheduled for November 17.

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