By Karim Hammam
Australia's oldest retailer, David Jones, has entered voluntary administration after 188 years of operation, citing rising costs, sluggish retail sales and supply chain pressures. The department store chain, founded in Sydney in 1838 by Welsh immigrant David Jones, employs about 6,000 staff across 38 stores in Australia and New Zealand.
Administration Process
FTI Consulting has been appointed as receivers and McGrathNicol as voluntary administrators. Stores will continue to operate while the firm reviews its operations. A transaction process seeking offers for recapitalisation or a sale as a going concern will commence immediately, managed by McGrathNicol.
Leadership Statement
Chief executive Erica Berchtold said the company would work with administrators, receivers and its secured lender during the process, which is Australia's closest equivalent to Chapter 11 bankruptcy in the United States.
Failed Lifeline Offer
Scentre Group, owner of Westfield shopping centres, offered a lifeline to David Jones but the offer was rejected by chain owner Anchorage Capital, according to ABC News. David Jones operates stores at 17 Westfield locations and had paid rent up to September 30, Scentre said in a statement to the Australian Securities Exchange.
Broader Retail Challenges
The retailer has struggled for more than a decade with the shift to online shopping and competition from fast-fashion chains. Its administration follows similar restructurings, job cuts and closures among Australian firms grappling with high fuel costs and a slowing economy.
