David Jones’ private equity owners are preparing to appoint voluntary administrators as soon as Thursday after rescue talks with Scentre Group collapsed when the department store did not pay rent for October.
Scentre, which owns the Westfield centres that house David Jones stores, rejected a restructuring proposal from the retailer and later put forward a counteroffer that David Jones’ board declined, according to a person close to the negotiations.
“We have made a generous offer to Anchorage Capital Partners that would have facilitated the continuation of David Jones trading,” Scentre chief executive Elliott Rusanow said in a statement. “That offer has disappointingly been rejected by them.”
Board directors are now assessing how long David Jones can continue to trade before appointing voluntary administrators, who are expected to be McGrathNichol, the same person said. A board meeting convened on Wednesday evening and the owners were expected to reach a decision by Thursday morning.
Chief executive Erica Berchtold and two board directors, Phillip Cave and Simon Woodhouse, are involved in the discussions. Woodhouse and Cave are also executive chair and managing partner at private equity firm Anchorage Capital respectively.
The retailer’s initial restructuring plan put to Scentre proposed handing over nine stores from February, keeping three sites on rents set at 8 per cent of sales, allowing five stores to continue on current terms, and unlocking $45 million in bank guarantees in exchange for equity.
Failure to pay rent for October was a key flashpoint in the breakdown of talks, the source said. Scentre has 17 shopping centres where David Jones operates, and its chief executive said the unpaid rent meant David Jones was in breach of lease agreements.
“Hilco Capital has had no formal update on the status of negotiations.”
Hilco Capital, which provided extra funding to support David Jones through the critical Christmas period, confirmed it had advanced above the agreed facility to allow the retailer to increase stock holdings ahead of the busy trading season.
Financial pressure on the business is substantial: lease and rent costs totalled $125 million in the 2025 financial year, while finance costs were $153 million, according to accounts released earlier this year. Suppliers have told the publication they are already restricting the financial terms of sales as payment times lengthen, and they would become unsecured creditors with potential significant losses if administrators are appointed.
Employees face heightened uncertainty as the group negotiates rent cuts and possible store closures, with unions and retail workers preparing for job losses should the company enter administration. David Jones and Anchorage Capital Partners declined to comment.
