As tipped by ChannelNews last night, David Jones has entered voluntary administration after last-minute rescue talks failed, leaving more than 6,000 employees facing uncertainty and suppliers awaiting details of their exposure.

The decision follows a Wednesday night board meeting and the breakdown of negotiations over rent relief and early exits from loss-making stores.

McGrathNicol has been appointed voluntary administrator, while secured lender Hilco Global has appointed FTI Consulting as receivers and managers. Physical stores and the online business will continue trading while receivers review operations.

The number of suppliers affected and the total amount owed to them have yet to be established.

Chief executive Erica Berchtold and Anchorage Capital Partners managing partner Simon Woodhouse addressed staff on Thursday morning as control of the 188-year-old retailer passed to insolvency specialists.

David Jones operates 38 stores across Australia and New Zealand. Before the appointments, the business had reportedly been pursuing a restructuring plan centred on about 12 key stores, raising questions over the future of much of its network.

The collapse followed unsuccessful negotiations with major landlords, including Westfield operator Scentre Group, which houses 17 David Jones stores.

David Jones had sought rental concessions and permission to leave leases at underperforming locations early. However, the parties failed to agree on a rescue package.

Scentre chief executive Elliott Rusanow said the landlord had made a “generous offer” that would have helped David Jones continue trading through Christmas, but that it had been rejected. Scentre said the retailer’s rent was paid only up to September 30.

Anchorage acquired David Jones from South Africa’s Woolworths in 2023 for a reported price of less than $100 million. The administration now places the private equity firm’s investment at risk.

It is the latest high-profile failure involving a business owned or previously floated by Anchorage. Scott’s Refrigerated Logistics collapsed in 2023, disrupting food and supermarket supply chains. Dick Smith, which Anchorage floated in 2013, subsequently entered administration after the firm had exited its investment.

Berchtold said David Jones had developed a plan to reset the business and would work with the administrators, receivers and secured lender to pursue it.

FTI Consulting’s Christopher Hill pointed to difficult retail conditions, rising costs, an outdated store footprint and supply chain challenges as factors behind the collapse.

McGrathNicol will immediately begin seeking proposals to recapitalise David Jones or sell it as a going concern. The review will determine the future shape of the retailer, with staff and suppliers still awaiting clarity on closures, job losses and outstanding payments.

More to follow: