200-year-old Australian retailer dumped by Woolworths is closing half its stores

Australian retailer David Jones will close half of its department stores by the end of the year as part of 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. 

JSE-listed Woolworths bought the chain in 2014 for R21.4 billion, but struggled to replicate its successful South African upmarket food business.

It sold the business to Anchorage in March 2023 for R1.1 billion.

The David Jones stores now set to be axed include Green Hills near Newcastle, a site currently leased from Stockland, as well as those in Parramatta and Warringah Mall.

Both of these locations are 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 Sept. 30.

As David Jones fell into administration, CEO 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 17 November. 

In a trading update released on Wednesday, 11 November, Woolworths said some of its Country Road Group brands trade as concessions within David Jones.

With David Jones now placed into administration and receivership, Woolworths said it is in communication with the appointed receivers and managers and is
assessing what this means for the continued trading relationship.