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Mega blow for David Jones: Half of all stores will close down – with thousands set to lose their jobs
FTI Consulting, the receiver for Australian department store David Jones, is expected to announce plans to close about half its stores, putting thousands of jobs at risk. The closures would mark a major contraction for the 188-year-old retailer, which entered voluntary administration and receivership last week.
A plan reportedly provided to landlords by David Jones and owner Anchorage Capital Partners proposes shutting nine stores in Westfield malls, four of which were unprofitable. Other closures are said to involve sites operated by GPT, Stockland and Vicinity. The company’s financial collapse followed failed rescue talks with Scentre Group, Westfield’s parent, after David Jones failed to pay rent; the future of its roughly 6,000 staff is uncertain.
In short
- David Jones is expected to close about half its stores.
- Thousands of jobs are at risk.
- The retailer entered receivership after failing to pay rent.
Steelman: both sides, in good faith
The strongest fair case each way — we don't pick a winner.
The case for
Closing unviable stores could give David Jones a better chance of surviving by reducing rent and other operating costs, preserving jobs in the stores that remain and allowing the business to focus on locations it can sustain. A smaller retailer may also be more attractive to buyers or investors, offering a path to continued trading and service for customers.
The case against
Closing about half the stores would put thousands of livelihoods at risk and could weaken the brand and remaining business by reducing its reach, customer base and bargaining power with suppliers. Critics could argue that workers, communities and landlords would bear much of the cost of a restructuring shaped by financial decisions made by the company and its owner.
Explained simply
David Jones is an Australian department store chain that sells clothing, homewares and other goods. Founded in 1838, it has operated for nearly two centuries and has stores in major shopping centres as well as other locations.
The retailer is owned by Anchorage Capital Partners, an investment firm. Its financial troubles led it into voluntary administration, a process in which an external administrator assesses whether a business can keep operating, and receivership, where a receiver manages assets and debts.
Landlords such as shopping-centre groups Westfield, GPT, Stockland and Vicinity own or manage many of its store sites. The company’s difficulties matter to its roughly 6,000 staff, as well as shoppers, suppliers and landlords whose business is linked to the chain.