David Jones entered administration, with receivers FTI Consulting taking control of day-to-day operations and administrator McGrathNicol seeking a buyer or fresh capital injection, The Guardian reported. The 188-year-old retailer, which operates 43 stores across Australia and New Zealand and occupied space at 17 Westfield locations, collapsed after unpaid rent arrears from September triggered the administration.
Small suppliers described David Jones offering tiered payment terms of up to around six months, with deeper discounts required to obtain faster payment. Suppliers were told they have no legal grounds to reclaim their products even where invoices have not been paid, while David Jones continued to sell the stock and retain proceeds.
Sydney-based drinkware brand Beysis dispatched half a 40-foot shipping container of stock to David Jones flagship stores in April, worth tens of thousands of dollars, under 14-day payment terms. Slowdown Studio, a brand known for artist-designed woven blankets, sent stock to David Jones major city stores with an invoice of almost $75,000 that was not paid.
Large luxury brands such as Gucci removed their products from David Jones shelves after the administration was announced. Suppliers received a letter from the administrators asking whether they would continue supplying stock during the administration period. Scentre Group chief executive Elliott Rusanow said the company had made what he described as a generous offer to David Jones's private equity owner Anchorage Capital Partners that would have allowed David Jones to keep trading, but that the offer was rejected by Anchorage.
Jessica Bryce, co-founder of Beysis, said the missing funds were affecting the business's ability to hire casual staff, spend on marketing and purchase inventory ahead of the Christmas trading period. Small Australian suppliers owed money by David Jones are ranked near the bottom of the creditor hierarchy and face the prospect of recovering little or nothing of what they are owed.
Reporting: The Guardian
Background: ABC News, The Nightly
Written by Pick & Scroll News from the reporting and documents linked above.
