The unthinkable is now a very real possibility for Australia’s oldest and most beloved department store, David Jones.
After 188 years as a retail cornerstone, the iconic chain is teetering on the brink of collapse, facing a staggering $74 million loss, mounting debts, and aisles so empty they resemble a ghost town.
“They are very much on the precipice,” retail analyst Barry Urquhart told 7NEWS, warning that “closure and disposal are very real possibilities.”
Concern has grown after David Jones posted a $74 million loss in the 2024 financial year and has yet to lodge its most recent financial statement with the regulator, reportedly due last October.
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There are mounting fears about the future of Australia’s oldest department store, David Jones.
It mirrors a broader global rout in department stores as fast‑growing online rivals from China such as Shein and Temu lure bargain‑hunters.
The challenges faced by David Jones are not isolated.
Department stores globally have struggled, often losing market share to agile online competitors, particularly Chinese e-commerce giants like Shein and Temu.
This shift reflects a broader change in consumer behaviour. As one shopper noted, “It’s a nice shop, it’s just expensive to me because I’m broke.”
Urquhart elaborated on this trend, observing that “consumers have moved from being smart shoppers to discount shoppers to extreme discount shoppers.”
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David Jones has been a beloved Australian institution for 188 years. Photo: Steve Pohlner
Now there are fears rising interest rates and inflation could make conditions even worse for the retail giant, which is racing to reinvent itself.
Operationally, David Jones is undertaking significant measures to navigate its financial difficulties.
According to the Australian Financial Review, the company is reportedly delaying payments to key suppliers and has implemented staff reductions within its head office.
These actions are part of a broader effort by its private equity owners, Anchorage Capital Partners, to execute a critical turnaround of the loss-making department store chain.
Puig, a luxury brand owner, was among the wholesale suppliers whose payments were delayed.
While some payments have since resumed, they are frequently occurring later than previously agreed.
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Boxing Day sales in Melbourne. Picture: David Crosling
Natasha Halkett, a David Jones buying manager, communicated revised payment arrangements to suppliers in March, with these changes anticipated to be enforced for all suppliers by the end of June.
A spokeswoman for David Jones confirmed these changes, stating they are “part of a broader modernisation of the business.”
Despite challenges, David Jones is also investing in its future.
Anchorage has provided a $250 million cash injection to fund store refurbishments, such as the ongoing revamp at Chatswood Chase in Sydney, and to enhance its loyalty program.
These initiatives represent a strategic effort to boost sales and restore profitability.
Concurrently, the physical footprint of David Jones is being rationalised.
The company has been downsizing its presence in various locations, reducing floor space in refurbished stores within Westfield centres, including Bondi Junction and Burwood in Sydney, and Southland in Melbourne.
Furthermore, in January, David Jones announced its withdrawal from sites at QIC’s Castle Towers in Sydney’s northwest and Westfield Tuggerah on the NSW Central Coast.
The Castle Towers store, notably, had not undergone a significant refurbishment in two decades.