Key Takeaways
- • David Jones' private equity owner Anchorage Capital is on the cusp of appointing voluntary administrators as soon as Thursday morning, after rent talks with landlord Scentre Group collapsed over unpaid October rent.
- • Scentre Group, which operates 17 shopping centres housing David Jones stores, rejected the retailer's restructuring proposal and its counter-offer was in turn rejected by the David Jones board, according to a source close to negotiations.
- • Lease and rent costs totalled $125 million and finance costs $153 million in fiscal 2025, per financial accounts released earlier this year, underscoring the retailer's debt and cost pressures.
- • The administrator is expected to be McGrathNicol, and roughly 6,000 employees across stores, support centres and distribution centres are affected.
- • MST Marquee analysis suggests Myer could gain up to $180 million in sales if David Jones collapses, while specialty retailers such as JB Hi-Fi and Rebel could benefit from lower landlord rents.
Summary
David Jones' private equity owners are on the cusp of appointing voluntary administrators as soon as Thursday morning, after talks with major landlord Scentre Group fell over when the department store failed to pay rent for October, the Sydney Morning Herald reported. Scentre Group, the Westfield owner that operates 17 shopping centres in which the prestige department store is located, rejected a restructuring proposal put forward by David Jones. A counter-proposal from Scentre was subsequently rejected by the David Jones board, according to a source close to negotiations who was not authorised to speak publicly.
Scentre Group chief executive Elliott Rusanow said David Jones had not paid rent since October and was therefore in breach. "We have made a generous offer to Anchorage Capital Partners that would have facilitated the continuation of David Jones trading," Rusanow said in a statement. "That offer has disappointingly been rejected by them." The original restructuring proposal would have handed over nine stores from February, kept three stores at rents of 8 per cent of sales, continued five stores on current terms, and unlocked $45 million in bank guarantees in exchange for equity. A spokesman for David Jones confirmed that talks with Scentre had failed to resolve the impasse and had concluded.
Chief executive Erica Berchtold and board directors Phillip Cave and Simon Woodhouse, executive chair and managing partner at Anchorage Capital respectively, were convening a board meeting on Wednesday evening, with a decision on voluntary administration expected by Thursday morning. The administrator is expected to be McGrathNicol. Lender Hilco Capital said it had no formal update on negotiations, and had earlier provided additional funding above the agreed facility to support stock holdings ahead of the Christmas trading period.
Financial pressures extend beyond Scentre. Lease and rent costs totalled $125 million for fiscal 2025, and finance costs were $153 million, per financial accounts released earlier this year. Suppliers have restricted payment terms, and Accent Group moved to cash-on-delivery after unpaid invoices earlier this year, which were since resolved. Other commercial landlords are also owed rent. MST Marquee analysis suggests stores in Westfield Parramatta, Warringah Mall, Carindale, Indooroopilly, Robina, Sunshine Plaza, Westfield Marion, Doncaster, Southland, Carousel, Booragoon and Karrinyup may be earmarked for closure.
MST Marquee estimates Myer could see sales boosted by as much as $180 million if David Jones collapses, with up to half of lost David Jones sales potentially switching to Myer, which has 12 stores close to the likely closed sites. Specialty retailers such as JB Hi-Fi and Rebel may benefit from lower rents if landlords struggle to backfill space. David Jones is the country's 12th-largest retailer by floor space and employs around 6,000 people.
Scentre Group chief executive Elliott Rusanow said David Jones had not paid rent since October and was therefore in breach. "We have made a generous offer to Anchorage Capital Partners that would have facilitated the continuation of David Jones trading," Rusanow said in a statement. "That offer has disappointingly been rejected by them." The original restructuring proposal would have handed over nine stores from February, kept three stores at rents of 8 per cent of sales, continued five stores on current terms, and unlocked $45 million in bank guarantees in exchange for equity. A spokesman for David Jones confirmed that talks with Scentre had failed to resolve the impasse and had concluded.
Chief executive Erica Berchtold and board directors Phillip Cave and Simon Woodhouse, executive chair and managing partner at Anchorage Capital respectively, were convening a board meeting on Wednesday evening, with a decision on voluntary administration expected by Thursday morning. The administrator is expected to be McGrathNicol. Lender Hilco Capital said it had no formal update on negotiations, and had earlier provided additional funding above the agreed facility to support stock holdings ahead of the Christmas trading period.
Financial pressures extend beyond Scentre. Lease and rent costs totalled $125 million for fiscal 2025, and finance costs were $153 million, per financial accounts released earlier this year. Suppliers have restricted payment terms, and Accent Group moved to cash-on-delivery after unpaid invoices earlier this year, which were since resolved. Other commercial landlords are also owed rent. MST Marquee analysis suggests stores in Westfield Parramatta, Warringah Mall, Carindale, Indooroopilly, Robina, Sunshine Plaza, Westfield Marion, Doncaster, Southland, Carousel, Booragoon and Karrinyup may be earmarked for closure.
MST Marquee estimates Myer could see sales boosted by as much as $180 million if David Jones collapses, with up to half of lost David Jones sales potentially switching to Myer, which has 12 stores close to the likely closed sites. Specialty retailers such as JB Hi-Fi and Rebel may benefit from lower rents if landlords struggle to backfill space. David Jones is the country's 12th-largest retailer by floor space and employs around 6,000 people.
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