David Jones Given Debt Lifeline — But Questions Over Survival Remain

Struggling department store secures critical refinancing with Gordon Brothers, buying time but not cash, as suppliers demand payment upfront and trade credit insurance dries up.

Loss-making department store David Jones has secured a last-minute debt extension, with private equity owner Anchorage Capital Partners refinancing a $150 million facility through US asset recovery firm Gordon Brothers, a move that staves off immediate collapse but leaves deep structural questions unanswered.

The refinancing, confirmed by ChannelNews, replaces debt that was rapidly running out and approaching its call-in date as the retailer struggled through a turbulent market. Critically, sources say no new funds have been injected as part of the arrangement.

“Refinancing doesn’t get you more money, it just means you don’t have to pay the debt back yet.” claims Industry sources.

The deal removes near-term pressure on the iconic retailer but does little to address its underlying financial position. The company posted a $74.4 million loss last year, according to one source, who added that this year’s ASIC filings have not yet been lodged.

The situation with suppliers has grown increasingly strained. Multiple suppliers told ChannelNews that David Jones had persistently pushed out payment terms and repeatedly attempted to renegotiate agreements. Several received emails indicating payment would only be made once refinancing was finalised. Now, some appliance and consumer electronics suppliers have moved to a cash-on-delivery model , demanding payment before goods are dispatched, a significant departure from standard trade credit arrangements.

Trade credit insurance — which typically protects suppliers if a retailer collapses, is reportedly unavailable for David Jones, according to industry sources.
Anchorage Capital Partners acquired David Jones in 2022 for just $100 million, a fraction of the $2.2 billion Woolworths Holdings paid for the business in 2014. Since the acquisition, Anchorage has committed $250 million to store refurbishments, including the flagship Chatswood location in Sydney,  an investment widely regarded as having already proven favourable for the firm.

Yet insiders say the business continues to suffer from acute cashflow problems, struggling to fund day-to-day trading operations.

While the refinancing alleviates the most immediate fears of a collapse, analysts and industry sources caution that the underlying capital position of the department store remains precarious.