On knife’s edge: David Jones could appoint administrators by Thursday
David Jones’ major landlord - property giant and Westfield owner, Scentre - says the struggling department store has not paid rent since September as talks with the group’s landlords to stave off financial collapse teeter on the edge of failure.
Source close to negotiations with the landlords, but who are not able to speak publicly because of confidentiality, confirmed negotiations had failed. Unconfirmed reports say the company will go into administration today.
In a market update this morning, Westfield owner Scentre, said David Jones had paid its rent until September 30. “Scentre Group notes recent media reports regarding David Jones and its owner Anchorage Capital Partners,” the landlord said.
Scentre said it has $30 million in bank guarantees held against David Jones stores in Australia and New Zealand, which would cover eight months rent.
“These guarantees can be applied against any unpaid rent. These bank guarantees were put in place as a condition of the Group’s approval of Anchorage Capital Partners’ acquisition of David Jones in 2023,” it said.
David Jones’ lender Hilco Capital confirmed last week that it had provided additional funding to see it through December, traditionally the most crucial time of the year for department stores.
“Hilco Capital has funded above the agreed facility to allow David Jones to increase stock holdings ahead of the busy Christmas trade and sales period,” a Hilco spokesperson said.
On Wednesday Hilco said: “Hilco Capital has had no formal update on the status of negotiations.”
But the group was also negotiating with multiple landlords to slash its rent bill and close some loss-making stores.
Lease and rent costs totalled $125 million for the 2025 financial year, but its debt burden also weighed heavily on the group with finance costs totalling $153 million, financial accounts released earlier this year show.
Suppliers have told this publication they are already restricting the financial terms of sales to David Jones due to lengthening payment terms. They will become unsecured creditors and potentially lose significantly on any outstanding bills if the retailer goes into administration.
More to come.
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