David Jones secures lender support as filing delay fuels viability concerns in Australia

Traders Union
All News
Business & Wealth
Companies
David Jones lender support concerns

Highlights

David Jones secured around $10 million in additional funding from lender Hilco Capital before Christmas to stock stores amid mounting financial concerns.
David Jones missed the deadline to file financial year reports with ASIC as owner Anchorage Capital Partners announced a review of the store network and discussions with stakeholders.
Suppliers moved to extended payment terms and at least one major fashion brand removed stock, reflecting escalating pressure on the David Jones supply chain and staff as store closures are considered.

Funding support and regulatory pressure before Christmas

As reported by ABC News, David Jones has received extra funding from key lender Hilco Capital before Christmas to help the retailer stock stores for the festive shopping season while questions grow over its finances.

Hilco does not confirm the amount, but ABC says it understands the support to be about $10 million. In a statement, the lender says it remains supportive of the business and that any suggestion otherwise is false.

David Jones has also just missed a deadline to lodge its most recent financial year reports with the Australian Securities and Investments Commission, or ASIC. The retailer's owner, Anchorage Capital Partners, says it will not comment on speculation, but adds that David Jones is reviewing its store network and is in discussions with stakeholders to place the business on a viable financial footing.

Store network review raises pressure on suppliers and staff

The company is also facing ongoing media speculation that it may exit several stores in Westfield shopping centres. David Jones currently operates 38 stores nationally, making any network changes significant for Australia's department store and shopping centre sectors.

The Shop, Distributive and Allied Employees Association, which represents retail workers, says it is contacting David Jones employees to explain their rights if the retailer were to fail. The union calls the reports about the company's predicament alarming.

Pressure is also extending through the supply chain. At least one major fashion brand has removed some stock from David Jones over concerns about payment, while suppliers have already been moved onto extended terms this year to give the retailer more time to pay for inventory.

Founded in Australia in 1838, David Jones remains one of the country's best-known department store chains, selling categories from cosmetics to footwear and fashion. Its main listed rival is Myer, which trades on the ASX.

Our earlier report on activist pressure on Big Yellow outlined how two hedge funds built sizeable stakes and urged the UK self-storage group to explore strategic options, including a potential sale, arguing the shares were undervalued. We noted that the company’s stock had been weak despite solid results and that renewed takeover speculation was unfolding against a broader consolidation trend in UK listed real estate.

This material may contain third-party opinions, none of the data and information on this webpage constitutes investment advice according to our Disclaimer. While we adhere to strict Editorial Integrity, this post may contain references to products from our partners.