David Jones will close half of its stores and leave thousands of workers without jobs after the peak Christmas trading period, as the receivers in charge of the embattled department store owner try to revive the 188-year-old retailer by shrinking its footprint.
On Wednesday afternoon, the company told staff and suppliers about the restructure, which will shut 19 stores in the coming weeks. It said the cuts were necessary to give David Jones the best chance of a sustainable future. Chief Executive Erica Berchtold said the business could not continue operating as it was, and that the store portfolio "is no longer the right shape for the business."
The closures include seven stores in New South Wales: Macquarie Centre, Macarthur Square, Parramatta, Wollongong Central, Hornsby, Green Hills and Warringah Mall. Three Victorian stores will close: Malvern Central, Highpoint and Glen Waverley. Woden in Canberra will also shut, as will Hay Street Mall, Garden City and Carousel in Western Australia, Robina Town Centre and Sunshine Plaza in Queensland, West Lakes and Marion in South Australia, and the Newmarket store in New Zealand.
The news follows the retailer's collapse into administration last week after last-ditch negotiations with its landlords broke down. The closures will cost thousands of jobs in a workforce of about 6,000. Receivers from FTI Consulting called the decision "difficult" and the restructure "urgent," in line with a plan put forward by owner Anchorage before the collapse. FTI said the stores would keep trading for now, with no final closing date, but it expects them to cease trading by the end of the year. Gift cards can still be used, but new ones can no longer be bought.
Bernie Smith, New South Wales secretary of the Shop, Distributive and Allied Employees Association, blamed the job losses on bad management decisions going back years. He said the union had contacted other retailers to help find jobs for those affected. Senior union officials will meet David Jones representatives and administrators on Thursday.
Documents released on Tuesday evening showed that Anchorage Capital met insolvency specialist McGrathNicol and lender Hilco as early as July to look at restructuring options. Hundreds of suppliers have gone unpaid since the collapse last Thursday. They have been invited to a first creditors' meeting at 11 a.m. on November 17.
