The question hanging over David Jones is no longer whether it can survive in its current form but rather what potentially dire fate awaits the retailer’s stores, suppliers, staff and shoppers if administrators take control.

The Australian Financial Review has reported that negotiations between David Jones and its landlords have “irreconcilably” fallen over after days of last-minute talks. McGrathNicol is expected to be appointed administrator once the board meets, which could be as early as November 5. 

The reckoning comes almost two years to the week after Mosaic Brands entered voluntary administration and its lender, Hilco, appointed KPMG as receivers and managers on the same day. Within six months, every Millers, Rivers and Noni B store had closed after a sale process failed to find a buyer. Hilco now sits behind David Jones, and Australia’s oldest department store seems to be headed down the same path. 

Retail property expert Zelman Ainsworth, director of Ainsworth Property, told Inside Retail the company’s problems were not new. “David Jones’ challenges have been compounding for years. From the outside, there haven’t been notable changes to adjust their business,” he said.

David Jones operates 38 stores across Australia and New Zealand, primarily in shopping centres across Australia. If administrators are appointed, they will most likely keep stores open through Christmas, close the weakest sites and shrink the physical footprint to a more profitable shape. 

Stores at Westfield Parramatta, Hornsby, Southland, Woden and Carousel have been reported as under review. It’s been estimated that a third of David Jones’ store network generates 70 per cent of revenue.

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