Suppliers are starting to walk away from David Jones as insurance companies refuse to cover stock supplied to the struggling department store chain, raising fresh questions about the retailer’s ability to stabilise its business under private equity owner Anchorage Capital.

Following ChannelNews’ report yesterday on new operational moves by the retailer, several suppliers have contacted us claiming they are unable to obtain trade credit insurance to supply goods to the Anchorage Capital–owned retailer, which continues to haemorrhage losses.

Trade credit insurance is a critical safety net for suppliers. Without it, vendors risk being left unpaid if a retailer collapses or fails to meet payment terms. Now, multiple suppliers say insurers are simply refusing to cover stock destined for David Jones.

One major consumer electronics and appliances supplier said they were recently approached by David Jones to supply product but were forced to decline.

“We were approached by David Jones to supply stock but we had to decline due to our insurance company refusing us insurance of the stock. We knew that David Jones was struggling and there are real concerns among suppliers as to whether they will survive.”

The refusal by insurers to cover supplier risk is a major red flag in retail. Once insurers step back, suppliers often follow — tightening payment terms, reducing exposure, or simply walking away.

The development comes as David Jones faces mounting structural pressures in a department store sector that has been under global strain for more than a decade.

Mid-to-premium department stores have been squeezed by the rise of online marketplaces, declining shopping centre traffic and intense competition from ultra-low-cost global platforms such as Temu and Shein.

At the same time, the cost of operating physical department stores continues to rise, with landlords lifting rents in major shopping centres where flagship David Jones stores are located.

Financially, the retailer is already under significant pressure.

Anchorage Capital reported a $74.4 million loss on $2.19 billion in sales, with rising operating costs steadily eroding profitability.

To keep the business operating, Anchorage has been forced to secure additional funding facilities, with some analysts now speculating that the retailer could struggle to see the year out if further borrowing becomes necessary.

Adding to the pressure are broader economic headwinds. Rising oil prices, the potential for inflation to push toward 5%, and the prospect of further Reserve Bank rate increases are all weighing on discretionary retail spending.

The Australian retail market itself is currently walking a tightrope. Analysts describe the 2026 retail environment as resilient but cautious, shaped by structural shifts that are reshaping the sector.

These include increasingly value-focused consumers, aggressive competition from global platforms, the need for fully integrated omnichannel operations, relentless pressure on margins, and expanding category overlap between retailers.

For David Jones, the challenge is particularly acute.

Much of its revenue comes from discretionary categories such as fashion, cosmetics and lifestyle products — precisely the areas consumers cut back on first when economic uncertainty rises.

The retailer has already begun shrinking its physical footprint, with stores at Castle Hill and Tuggerah in NSW closed as part of its restructuring.

Recent changes to supplier payment terms have also triggered alarm among brands operating inside David Jones stores, with some questioning whether the changes signal deeper cash-flow pressures.

There are also growing concerns about the relevance of the David Jones brand itself.

As management cuts staff levels and moves away from the premium brands that once defined the department store, questions are emerging about whether the retailer is eroding the very identity that made it attractive to customers in the first place.

Before Anchorage acquired the business, analysts had already identified significant operational weaknesses including poor digital capability, weak use of customer data and an outdated merchandise mix.

Fixing those problems requires significant capital — something analysts believe Anchorage may be struggling to provide.

Even the company’s CEO has previously acknowledged that David Jones only had meaningful customer data on just 16% of its shoppers, highlighting how underdeveloped the retailer’s digital CRM infrastructure remains.

The broader strategic question now facing the industry is whether traditional department store models such as Myer and David Jones can survive in a platform-driven retail economy.

Anchorage is attempting to reposition David Jones as a premium omnichannel retailer while also exploring new revenue streams such as retail media networks — a strategy similar to JB Hi-Fi.

But retail media relies heavily on deep customer data and traffic scale, something David Jones currently lacks.

Meanwhile, the supplier insurance issue threatens to undermine the retailer’s ability to stock stores and maintain brand relationships — both essential for any turnaround strategy.

One industry observer said the trajectory could mirror the collapse of Dick Smith, another retailer once owned by Anchorage Capital.

“By next year David Jones could well be an online brand only similar to what happened with the Dick Smith brand, which is basically an extension of the cheap Kogan operation.”

The challenges facing David Jones are not unique.

Across the United States, department stores have faced repeated waves of Chapter 11 bankruptcies, restructurings and liquidations as the sector struggles to adapt to structural shifts.

Online retail, declining mall traffic, heavy debt loads and changing consumer behaviour have fundamentally reshaped the market.

Even luxury operators such as Saks and Neiman Marcus have been forced to restructure operations and close stores to survive.

With suppliers now unable to secure insurance to supply stock, David Jones may be entering the most critical phase of its turnaround attempt — one where confidence from partners, not just customers, will determine whether the iconic retailer can survive.