David Jones Receivers to Close 19 of Its 38 Stores

Receivers for David Jones said on November 11 that 19 of the department store chain's 38 stores will close, including its only New Zealand store, in Auckland's Newmarket. FTI Consulting's Christopher Hill, David McGrath and Joanne Dunn, who act for the chain's main secured lender, Hilco, began a seven-day consultation with staff at the affected stores the same day. The receivers said the stores would keep trading for now and that there was no final closure date, but "we anticipate they will cease trading by the end of the year." The Australian closures cover seven stores in New South Wales, among them Parramatta and Macquarie Centre, three each in Victoria and Western Australia, two each in South Australia and Queensland, and Woden in the Australian Capital Territory. The receivers said the steps were unavoidable if David Jones is to continue as a viable business. Chief executive Erica Berchtold told staff in a message that "our store portfolio is no longer the right shape for the business." A letter to suppliers said the affected stores were expected to trade through the peak seasonal period, with their stock to be discounted or moved to other stores. Westfield owner Scentre Group has said the chain has not paid rent on its Westfield stores since September. David Jones, which has about 6,000 employees, entered voluntary administration and receivership on November 5 after talks with landlord Westfield broke down. McGrathNicol's Jason Preston, Shaun Fraser, Jacinta Nielsen and Matthew Hutton were appointed administrators. Expressions of interest in buying the chain are due by November 13, creditors must lodge proofs of debt by November 16, and the first creditors' meeting is set for November 17. McGrathNicol plans to ask the New South Wales Supreme Court to extend the convening period to allow more time for a sale or recapitalisation.