From the Guardian · · 1m 50s
David Jones collapses into administration
The 188-year-old Australian department store has fallen into administration after chasing mass-market expansion instead of maintaining its luxury positioning.
In brief
The 188-year-old Australian department store has fallen into administration after chasing mass-market expansion instead of maintaining its luxury positioning. David Jones, an 188-year-old Australian retailer, has collapsed into administration. About 6,000 staff across 38 stores face uncertain job prospects as the…
A luxury store chasing mass market
David Jones abandoned prestige to chase profits through expansion, wrongly believing it could be both exclusive and everywhere at the same time.
The 188-year-old collapses
The retailer has collapsed into administration after falling behind on rent. Emergency talks between owner Anchorage Capital and lenders and landlords unravelled.
Receivers take control
Receivers FTI Consulting have taken over operational control as the business is prepped for sale. They warn that difficult decisions must be made.
“difficult decisions”
Six thousand jobs at risk
About six thousand staff spread across thirty-eight stores face uncertain job prospects. Some unprofitable stores in outer suburbs and regional locations risk imminent closure.
The path to survival
Retail experts say David Jones must radically retreat to a tight network of premium stores in prime locations, cutting the number of stores significantly.
A smaller future
Retail Doctor Group chief executive Brian Walker says if David Jones survives, in five years it would not surprise him to see twelve to fifteen stores.
“If it survives this, in five years or so, it wouldn't surprise me to see 12 to 15 David Jones stores”
The exclusivity problem
David Jones now resembles generalist luxury, where customers are uncertain what service or product exclusivity to expect. Brands have opened standalone stores elsewhere.
Service caught between eras
RMIT University advertising professor Robert Crawford says there is a clash between customers' memories of David Jones decades ago and the reality on the shop floor.
“It's been a bit of a death by a thousand cuts”
Christmas rush is critical
Receivers want to keep David Jones trading through Black Friday and Christmas, a critical period when customers will inject desperately needed cash into the store network.
The short version
David Jones, an 188-year-old Australian retailer, has collapsed into administration. About 6,000 staff across 38 stores face uncertain job prospects as the business seeks a buyer.
