From the Guardian · · 2m
Small suppliers left stranded as David Jones collapses
Local brands owed tens of thousands of dollars face months of unpaid invoices while luxury houses strip their stock and walk away.
In brief
Local brands owed tens of thousands of dollars face months of unpaid invoices while luxury houses strip their stock and walk away. David Jones went into administration owing small Australian suppliers months of unpaid invoices, while luxury brands recovered their stock and small businesses face losses they cannot…
Beysis ships to David Jones
In April, Sydney brand Beysis sent half a forty-foot shipping container of premium drinkware to David Jones's flagship stores. Co-founders Ariana Hendry and Jessica Bryce agreed to a substantial price cut for fourteen-day payment terms.
Payment never arrives
Two weeks passed, then a month, then three months. Hendry tried escalating the issue up the chain but received no response. About six weeks ago, she knew the writing was on the wall.
“The most frustrating part was the lack of communication.”
Slowdown Studio's seventy-five thousand dollar loss
Jacob Leung, co-founder of Slowdown Studio, sent a dispatch of artist-designed woven blankets to David Jones's major city stores a few weeks ago with an invoice for almost seventy-five thousand dollars.
Luxury brands versus small suppliers
Big luxury brands operate through dedicated concession stores within David Jones, retaining control of inventory and negotiating better payment terms.
Luxury brands strip their stock
When well-known brands such as Gucci stripped their products from David Jones's shelves on Thursday, they generally did so in case the retailer immediately closed its doors, leaving their products locked up.
David Jones enters administration
David Jones fell into administration on Thursday after missed rent payments to Westfield owner Scentre Group triggered the collapse.
Small brands face devastating losses
Jessica Bryce says the missing funds are a blow coming right before the retail sector's busiest trading period. The lost money affects how many casual staff Beysis can hire, marketing spend and inventory purchases.
“The fact that we don't have this money coming into Christmas has affected how many casuals we can put on, how much marketing spend we have, and how much inventory we've been able to purchase.”
Creditors meeting expected next week
FTI Consulting and McGrathNicol were contacted for comment. A creditors' meeting is expected to be scheduled for next week. Small suppliers now face tough choices about whether to keep sending stock to David Jones.
What matters most
David Jones went into administration owing small Australian suppliers months of unpaid invoices, while luxury brands recovered their stock and small businesses face losses they cannot recoup.
