Australian department store chain David Jones has entered voluntary administration on 5 November after failing to reach an agreement with its landlords over a restructuring plan, putting more than 6,000 jobs at risk and raising questions over its future ahead of the Christmas trading period.

The retailer’s board appointed administrators McGrathNicol, while its main financier, Hilco, appointed FTI Consulting as receivers to take control of day-to-day operations. The dual appointment will allow administrators to seek a buyer or fresh investment while receivers oversee the business and consider restructuring options.

David Jones operates 38 stores across Australia, including 17 in Westfield shopping centres, alongside its online business. Its stores and website will continue trading while the process takes place, although closures are expected as the company seeks to reduce its retail footprint.

Christopher Hill of FTI Consulting said the retailer faced challenges from rising costs, an outdated store network and supply chain pressures. He said the appointments would provide an opportunity to restructure the business, while warning that the process would involve difficult decisions for stakeholders.

The collapse follows a breakdown in negotiations with Scentre Group, the owner of Westfield shopping centres and David Jones' principal landlord. Scentre said the retailer had failed to pay rent since September, with the landlord claiming it had rejected an offer from owner Anchorage Capital Partners that would have allowed stores to continue trading.

David Jones chief executive Erica Berchtold, who took the role in June, said the retailer had a developed plan to reset the business and would work with the administrators, receivers and secured lender to pursue it.

The administration places suppliers and customers holding gift cards at risk of financial losses. Angus Kidman of consumer comparison site Finder warned that vouchers could become worthless if a buyer could not be found, advising customers to use them while stores continued accepting them.

Founded in 1838 by Welsh immigrant David Jones, the retailer is the world's oldest department store operating under its original name. It became a prominent fixture of Australian retailing, with its Sydney flagship hosting a banquet for Queen Elizabeth II during her 1954 visit.

The business has changed ownership several times, with South African retailer Woolworths acquiring it for A$2.1 billion in 2014 before selling it to Anchorage in 2023 for a reported A$100 million. Its difficulties reflect wider pressure on traditional department stores across Australia, with rival Myer also struggling to maintain performance as consumer shopping habits shift towards online retail.

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