businessBREAKING
David Jones Faces Administration After Landlord Scentre Reveals Unpaid Rent
David Jones is likely to appoint administrators after talks with its landlords broke down over unpaid rent.
Key points
- Scentre says David Jones has not paid rent since September and is in breach.
- Scentre says its generous offer to owner Anchorage Capital Partners was rejected.
- Stores are expected to keep trading initially as insolvency practitioners seek to cash in on the Christmas rush.
Why it matters. Administration could affect David Jones' 38 stores, 17 of which sit in Westfield centres, as insolvency practitioners test a smaller-store plan with landlords and buyers.
David Jones is likely to appoint administrators within 24 hours after talks with its landlords broke down, a source told The West Australian. Scentre Group chief executive Elliott Rusanow said on Wednesday the retailer had not paid rent since September and was in breach. Scentre said an offer to owner Anchorage Capital Partners had been rejected and that David Jones had lodged $45m in bank guarantees, which can be applied against unpaid rent.
Latest updates
David Jones Faces Administration After Landlord Scentre Reveals Unpaid Rent
David Jones, the 188-year-old department store chain, is expected to appoint administrators after its largest landlord, Scentre Group, disclosed that the retailer has not paid rent since September. A source told The West Australian that the appointment is likely within the next 24 hours. The collapse follows negotiations with landlords, including Westfield-owner Scentre Group, that failed to produce a resolution. Other outlets, including the Sydney Morning Herald and The Age, report the retailer faces collapse after those talks broke down. Administrators would take control of the business and assess its options, which could include a sale or restructuring. The company has not been quoted in the reports available at the time of publication.
David Jones owner Anchorage silent as department store faces store closures
David Jones and its private equity owner Anchorage Capital Partners have declined to comment as reports circulate that the department store could close more than half its stores. The 188-year-old retailer operates 38 stores around Australia. The union representing thousands of David Jones workers is planning for the worst, according to reports. Reductions would also shrink the size of stores that remain open. No formal announcement has been made, and the company's position has not been confirmed.