A renewed sense of confidence is emerging at David Jones, Australia’s oldest department store, as chief executive Scott Fyfe says the 187-year-old retailer still has a bright future after navigating one of the most challenging periods in its history.

Fyfe’s optimism stems from improving financial conditions among higher income shoppers and the unveiling of a major 40 million dollar upgrade at the company’s Chatswood Chase store in Sydney’s north. Still, he acknowledges the retail sector faces a critical run toward the end of the year, with Black Friday, Cyber Monday and Christmas sales expected to determine much of the sector’s performance.

Fyfe has led the upmarket retailer for five years and chose to stay on under Anchorage Capital Partners, which acquired David Jones in 2022 for under 100 million dollars from South Africa’s Woolworths Holdings. Woolworths still owns the Country Road Group.

Anchorage has since launched a 250 million dollar brand overhaul that includes a loyalty partnership with Qantas and a 60 million dollar investment in technology for a new app and website. The retailer’s transformation has not come easily, with subdued consumer spending and a more expensive than expected separation from Country Road.

“2026 will be better. People have come to live with cost-of-living pressures, which are now falling. I think the economy will be more prosperous,” Fyfe told The Australian Financial Review.

Despite that confidence, the business remains under earnings pressure. Fyfe, a Scottish executive with two decades of experience at iconic British retailer Marks and Spencer, said David Jones will not return to profitability in 2025. Last year’s filings showed a 74.4 million dollar loss in the 2024 financial year, and the company warned it could face a shortfall in everyday operating funds until securing a new 190 million dollar debt facility in October from Gordon Brothers and Nomura.

Some suppliers reported payment delays during the past year due to cashflow issues and soft sales. Anchorage did not intervene, leaving David Jones to negotiate extended payment terms. Fyfe said suppliers had been “hugely supportive and loyal to us at the most challenging times of the transformational journey.”

The Chatswood store overhaul contributed to the turbulence. For much of the year, the location was effectively a construction site.

“We could have decided to pause. We took the brave decision to keep going,” Fyfe said. “I’m really pleased to say that these times are behind us.”

Private ownership has allowed the retailer to accelerate its strategy, and Fyfe is confident profitability will return in 2026. Same-store sales rose 3 percent in the first quarter.

On the floor of the revamped Chatswood store, Fyfe highlights aspirational fashion labels including Aje, Zimmermann, Alemais and the Japanese luxury beauty brand Cle de Peau Beaute, now exclusive to David Jones.

Although the retailer has lost exclusivity for brands like Sportscraft, Jag and Country Road, it has added 50 new and exclusive labels, including SIR, Oroton Ready-to-Wear, Sarah and Sebastian, Mud Australia and Jellycat.

Shoppers are taking notice. Long-time customer Fiona Brewer praised the elevated atmosphere compared with rival Myer. “I’m seeing lots of new labels that I haven’t seen before that feel a bit higher end,” she said.

The store’s 17,000 square meters across two floors now include more pay points, beauty suites, personalised styling areas and pop-ups from brands such as Tom Ford and Stanley. Digital screens throughout the store support the retailer’s new media business, David Jones Amplify, which aims to capture part of the 2.5 billion dollar plus retail media market by delivering targeted advertising based on customer data.

Chatswood already ranks in the top five out of David Jones’ 40 stores, yet the transformation comes during a difficult period for global department stores. UK luxury retailer Selfridges has seen declining sales for five years, while the US chain Saks Fifth Avenue faces continued pressure. Hudson’s Bay Company, its Canadian parent, filed for bankruptcy in June after spinning off Saks and Neiman Marcus into a stand-alone entity.

Department stores worldwide have reduced physical space while growing online sales, a shift that Craig Woolford from MST Marquee says has delivered limited overall growth.

He added that the sector struggles to attract new customers as emerging direct-to-consumer brands gain traction. “If you want younger shoppers you have to have those brands they want to buy,” he said.

Fyfe says David Jones is at a pivotal moment. The retailer aims to add more partners to its loyalty program and integrate AI tools to better understand customer behaviour. A major milestone came in September when David Jones launched its loyalty alliance with Qantas Frequent Flyer.

The new David Jones mobile app serves as the hub for rewards, allowing shoppers to link memberships, track points and access exclusive benefits. Loyalty programs have become essential for retaining customers and gathering the data needed for decisions on pricing, range and personalisation.

Myer, the company’s closest competitor, has recently relaunched its Myer One program and is also expanding its brand portfolio. But it faces internal challenges with a troubled warehousing system and ongoing integration of apparel brands bought from Premier Investments.

Loyalty consultant Philip Shelper said the Qantas partnership was a strong strategic move. About 140,000 new members have joined since September, lifting the total to 3.74 million. Myer currently leads with 4.7 million members.

Shelper expects David Jones to push suppliers to fund bonus points instead of discounting. “David Jones needs to get suppliers to fund bonus points as an alternative to discounting products,” he said, adding that the loyalty battle will intensify in the year ahead.

With a refreshed flagship, new technology and a growing loyalty base, Fyfe believes David Jones is on the brink of a turnaround. Whether that plays out will depend heavily on the critical shopping season ahead.