Brands asked to keep supplying David Jones despite unpaid debts

David Jones's embattled suppliers have been asked to continue providing goods and services to the collapsed retailer, despite having no guarantee they will be reimbursed for previously unpaid debts.

Documents seen by ABC News show the unclear situation facing suppliers after the 188-year-old retailer was plunged into receivership and voluntary administration this week.

"It is really stressful," Jacob Leung told ABC News.

"We are quite frankly really nervous."

It was only 18 months ago that Mr Leung and his wife, Sarah Jane, started supplying David Jones with handwoven blankets from their small business, Slowdown Studio.

"We'd never received an order that size. We loved the brand, the heritage, the whole David Jones experience. We were so pumped," he says.

The local business sent another order to David Jones just last month. They say they have not seen the $75,000 they are owed and their invoice is now overdue.

"It has massive implications not just for us but our manufacturers, our staff, the invoices we need to pay,"

he said.

DJs in administration, but receivers appointed

The David Jones collapse is a complicated affair, with receivers appointed on behalf of the company's biggest lender, Hilco, to protect an investment estimated in the hundreds of millions.

Documents seen by ABC News sent out from the receivers' firm, FTI Consulting, maps out the next steps for suppliers.

It notes David Jones is "continuing to trade in the ordinary course under the control of the receivers" while its administrators push for "the recapitalisation and/or sale" of David Jones.

It goes on to say that any "outstanding debts owed by David Jones" when the administration started on November 5 are now "subject to the outcome of the administration process".

Meanwhile, FTI notes that suppliers can keep up their relationship with David Jones if they create fresh supplier accounts with the receiver.

"All properly incurred post-appointment trading invoices will be paid by the receivers in accordance with existing trading terms,"

it stated.

David Jones's receivers are telling brands they can keep supplying the retailer, while luxury brands are visibly stripping stock from its stores.

Gucci, Valentino and Saint Laurent are among high-end brands that have left shelves bare as concern spreads about the retailer's future.

Mr Leung is not sure what he will do next and if their business will keep supplying stock to David Jones.

Six-figure invoice owed

It is a similar predicament for another start-up Australian label, Beysis, which says it is owed for an invoice in the six figures for a delivery earlier this year.

Co-founder Jessica Bryce said they likely could not justify the risk of continuing to sell to David Jones through the administration process.

"I don't think that we would. Not at this stage. We're owed money and the stock," she said.

"As a small business we just wouldn't take that risk.

"It hurts. It affects everything that we do. It has been a tough year."

Ms Bryce said they had heard reports in the industry that big brands were being put on payment plans by David Jones, while Beysis was getting paid erratically.

"It affects how many casuals we can put on, how much marketing we can spend, inventory. It affects everything, you name it."

What is next for suppliers?

David Jones was only bought by private equity firm Anchorage three years ago for $100 million.

Documents from ASIC show under Anchorage, the business racked up losses of $74 million in the 2023–24 financial year followed by $62 million losses in 2024–25.

"[Anchorage] had a very clear plan on how to turn David Jones around and make it profitable, and clearly that doesn't seem to have panned out," Monash University law and insolvency expert Tamara Wilkinson said.

The company did not lodge its latest financials on time to ASIC last week, in one of the clear signs that the retailer was really on its knees.

Finer detail on how much is owed has not been made public, and a first creditors meeting is not set until next week.

Some suppliers have told ABC News they are in the dark about next steps.

Dr Wilkinson warned that even a sale of the David Jones business might not claw back what was owed to creditors, including its 6,000 employees or suppliers.

She explained that in an insolvency, if money could be clawed back, it was secured creditors — in this case, Hilco — that stood first in line.

They would be followed by employees who would receive their wages and super owed, and then suppliers or gift card holders.

That meant small businesses like Slowdown Studio and Beysis were at "the very bottom" of the pecking order, Dr Wilkinson said.

"The only people worse off than them are the shareholders of the company," she added.

Dr Wilkinson wants to stay hopeful about the iconic retailer's future.

"I think someone will buy it," Dr Wilkinson said.

"It is a beloved Australian business. My money is, David Jones as a brand will survive."

Suppliers to get more information soon

FTI Consulting told the ABC they would provide no further comment.

Meanwhile, the administrators at McGrath Nicol said suppliers and other creditors owed cash would get more information soon.

"The administrators will issue their initial circular to all creditors on Tuesday 10 November," McGrath Nicol said in a statement to ABC News.

"This will include details for creditors on attending the first meeting of creditors at 11am on Tuesday 17 November and further information regarding the voluntary administration process."

Slowdown Studio's Mr Leung has never been through a company administration before and does not know what to expect as an unsecured creditor to David Jones.

"It seems like we'll be lucky if we get a couple of cents to the dollar from them eventually. But that 'eventually' could be months or a year away, who knows," he said.

"It's really stressful. We really don't know how it's going to look, given the economy at the moment. We are quite frankly really nervous."