David Jones collapses into voluntary administration, and its lender appoints FTI Consulting as receivers
The 188-year-old retailer's 38 stores and website keep trading for now, but the receivers say the store network is likely to shrink
Sources: Sydney Morning Herald, ABC News (Australia), The Guardian, BusinessDesk
David Jones has gone into voluntary administration after talks with its main landlord, Westfield owner Scentre Group, broke down, ABC News and the Guardian report. The board appointed McGrathNicol as administrators, and lender Hilco appointed FTI Consulting's Christopher Hill, David McGrath and Joanne Dunn as receivers and managers. Stores and online sales continue under the receivers, who say steps to reduce the retail footprint are likely. The retailer has 38 stores and more than 6,000 staff.
David Jones has collapsed into voluntary administration, putting the future of the 188-year-old department store in doubt weeks before Christmas. This report draws on ABC News, the Guardian, BusinessDesk and the Sydney Morning Herald. ## Update: administrators and receivers appointed Staff were told on Thursday 5 November that the board had appointed McGrathNicol as voluntary administrators, ABC News, the Guardian and BusinessDesk report. Hilco, one of its lenders, then appointed Christopher Hill, David McGrath and Joanne Dunn of FTI Consulting as receivers and managers, ABC News reports, giving FTI day-to-day control of the business. Stores and the website will keep trading under the receivers while they review operations, McGrathNicol said. In a letter to staff obtained by the ABC, McGrath wrote: "It is likely there will be steps to reduce the retail footprint in the near-term." Staff will continue to be paid normally. David Jones has 38 stores and more than 6,000 staff, the Guardian reports, and creditors are due to meet next week, according to the retail workers' union, the SDA. "We have a well-developed plan on how to reset the business for the future," chief executive Erica Berchtold said. Receiver Christopher Hill said: "Voluntary administration and receivership provides breathing space and an opportunity to restructure the business." The SDA's national secretary, Gerard Dwyer, said keeping jobs was the priority: "Smaller is better than no David Jones." Finder's Angus Kidman urged customers to use gift cards quickly: "If the business doesn't find a buyer, that gift card will almost certainly be worthless." ## Background The collapse followed the breakdown of rent talks with Scentre Group, which said David Jones had not paid rent since September and that private equity owner Anchorage Capital Partners had rejected "a generous offer", the Herald and the Guardian report. Scentre has said David Jones provided $45 million in bank guarantees across its Westfield portfolio, ABC News reports.
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