David Jones Enters Voluntary Administration After 188 Years

David Jones, Australia's oldest department store chain, went into voluntary administration on Nov. 5, putting roughly 6,000 jobs at risk, according to the BBC. The company's 38 physical stores and its online site will keep operating while receivers FTI Consulting review the business, voluntary administrators McGrathNicol said.

The decision caps a 188-year run for the retailer, known locally as DJs, after years of declining in-store traffic as shoppers moved online, the BBC reported.

Why did David Jones go into administration?

The board's vote came hours after Scentre Group, which owns the Westfield shopping centers that house 17 of the chain's 38 stores, said David Jones had not paid its October rent and was "therefore in breach" of its tenancy agreement, according to the BBC.

Christopher Hill of receivers FTI Consulting pointed to a broader set of pressures. "We understand the current retail trading environment, rising costs, a significant and outdated retail footprint, and supply chain challenges have led to this point," Hill said, per the BBC. He added that appointing administrators and receivers gives the company "breathing space" and a chance to restructure.

What happens to the 38 stores and 6,000 employees now?

• 38 physical stores remain open, including 17 inside Westfield centers, the BBC reported.
• About 6,000 staff stay employed while the review proceeds.

No store closures or layoffs have been announced. The company's online site continues to take orders during the administration period, according to the filing cited by the BBC.

Who is running the company now?

McGrathNicol is handling the voluntary administration, while FTI Consulting serves as receiver reviewing David Jones's operations, the BBC reported. CEO Erica Berthold remains in place and said the company has a "well-developed plan" to "reset the business for the future," thanking "customers, our team members and our partners for their continued support of David Jones through this period," according to the BBC.

What does the collapse mean for Australian retail?

Jana Bowden, who teaches marketing at Macquarie University's Business School, told the BBC the chain's fall signals the "death knell" for the traditional department store format in Australia. She described David Jones at its peak as the country's answer to Harrods — "a place you would go to see and be a part of the glitz and glamour" — but said suburban locations in recent years had grown "mundane" and lacked the flagship stores' polish.

The retailer's history includes a 1954 banquet for a 27-year-old Queen Elizabeth II on the seventh floor of its Elizabeth Street store in Sydney, according to the Sydney Morning Herald as cited by the BBC. For now, the brand's black-and-white houndstooth signage stays on store shelves while receivers determine what comes next for a company that outlasted nearly two centuries of Australian retail history before the shift to online shopping caught up with it.

Further updates on store operations and employee status are expected as FTI Consulting completes its review, per the BBC.