On knife’s edge: David Jones could appoint administrators by Thursday

David Jones’ private equity owners are on the precipice of appointing voluntary administrators as soon as Thursday morning after talks with major landlord Scentre fell over when the department store failed to pay rent for October.

Westfield owner Scentre Group, which operates 17 shopping centres in which the prestige department store is located, rejected a restructuring proposal put forward by David Jones. A counter-proposal by Scentre was subsequently rejected by David Jones’ board of directors, according to a source close to negotiations but not authorised to speak publicly.

A deal to save the 188-year-old retailer David Jones may be unwinding.Louise KennerleyDavid Jones’ board directors are now assessing how long the 188-year-old retailer can continue trading before it appoints a voluntary administrator, which is expected to be McGrathNichol, the source said.

Chief executive Erica Berchtold and board directors Phillip Cave and Simon Woodhouse, who are executive chair and managing partner at private equity firm Anchorage Capital respectively, are convening a board meeting on Wednesday evening, with a decision on voluntary administration expected to be made by Thursday morning.

Scentre Group chief executive Elliott Rusanow said David Jones had not paid rent since October and “therefore are 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.”

David Jones’ initial restructuring deal to Scentre Group initially proposed handing over nine stores from February, three stores kept at rents of 8 per cent of sales, five stores to continue on current terms, and for $45 million in bank guarantees unlocked in exchange for equity in David Jones.

“It’s a straight financial calculation as to how they can continue trading,” the source said. “Do they meet the solvency test? They need to sit down and discuss the finances.”

David Jones’ failure to pay rent for October was a key flashpoint in why talks with Scentre Group fell over, a source said.

On Wednesday, David Jones’ lender Hilco said in a statement: “Hilco Capital has had no formal update on the status of negotiations.”

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.

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.

A spokesman for David Jones confirmed that talks between the group and Scentre failed to resolve the impasse and talks had now stopped.

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