David Jones is facing renewed pressure from suppliers after asking some of its key brand partners to accept extended payment terms as the retailer works to rebuild inventory ahead of the crucial summer trading season.

The department store chain, now owned by private equity firm Anchorage Capital Partners, is proposing a 20-week repayment schedule for outstanding supplier invoices, despite recently securing additional financing intended to strengthen the business.

The proposal has disappointed many suppliers, who had expected the refinancing to restore normal payment arrangements after months of delayed settlements.

In correspondence sent to selected suppliers, recently appointed chief executive Erica Berchtold outlined a plan that would spread payments over approximately five months while gradually clearing overdue balances. The retailer said the approach would help replenish stock levels and support its broader turnaround strategy.

Within the retail sector, delayed supplier payments through trade credit are common practice. However, suppliers say extending repayments over 20 weeks is considerably longer than the two-month arrangements they have previously accepted.

Berchtold acknowledged that lower inventory levels following the winter trading period had influenced the proposal, despite the company’s improved financial position after refinancing its debt.

David Jones completed a new lending agreement earlier this year after Hilco Capital assumed control of an existing financing facility previously held by Gordon Brothers and Nomura. Industry sources have suggested the revised facility provides an additional $30 million to $40 million in funding, although access to those funds depends on increasing inventory to drive stronger sales.

The development comes just months after ChannelNews reported that David Jones had secured a refinancing package that bought the retailer additional time to restructure its business. While the agreement eased immediate debt concerns, questions remained over cash flow, supplier confidence and the company’s long-term viability.

Some suppliers have expressed frustration that the refinancing has not resulted in an immediate return to standard trading terms.

Several have argued they were led to believe outstanding balances would be settled promptly once the new funding was secured, while others claim they are effectively being asked to finance the retailer’s recovery themselves.

A David Jones spokesperson said the business is continuing to negotiate payment arrangements individually with affected suppliers and noted that many have already agreed to revised terms.

The company said the refinancing provides an opportunity to reset the business, although rebuilding operations and supplier relationships will take time.

Berchtold took over as chief executive in late June, replacing Scott Fyfe, who had overseen a major transformation of the retailer, including investments in digital shopping, a partnership with the Qantas Frequent Flyer program and a $40 million redevelopment of one of the company’s flagship Sydney stores.

Despite those initiatives, David Jones has reported losses for two consecutive years as consumers continue to limit discretionary spending in a challenging retail environment.

The retailer is also reviewing its physical store network. Industry sources believe the company could reduce its portfolio from 38 stores to around 20 over time, following recent closures at Castle Hill, Tuggerah and Mandurah.

David Jones has declined to comment on potential future closures but said any decisions regarding its retail footprint will be based on customer demand and lease arrangements.

The company also rejected speculation that it is considering entering administration, maintaining that its current strategy is focused on strengthening the business through investment in digital capabilities, improved inventory management and long-term growth initiatives.