David Jones secures $7M debt lifeline for Christmas stock
What's the deal? David JonesDealroom has a profile for this one. Try Dealroom → has secured US$6.47M in emergency debt funding from lender Hilco GlobalDealroom has a profile for this one. Try Dealroom → to replenish stock before the critical Christmas trading period, according to The Australian Financial Review. The Australian department store agreed the capital after weeks of talks over inventory levels, amid concerns it lacked enough stock for its busiest sales window.
Why now? The funding follows a breach of a lending covenant and mounting cash-flow pressure. The retailer missed payments to some concession operators last Friday, though all outstanding amounts were paid this week, the Financial Review reported.
What's the endgame? Chief executive Erica Berchtold is negotiating with landlords to cut the 38-store network by more than half. She is also seeking the release of funds from $70 million in bank guarantees — most held by largest landlord Scentre GroupDealroom has a profile for this one. Try Dealroom →, operator of Westfield centres — in exchange for handing back selected stores.
A David Jones spokesman said Berchtold was in "advanced discussions with key stakeholders about how David Jones is adapting to the ever-changing retailing landscape".
By the numbers: The 188-year-old retailer, owned by Anchorage Capital PartnersDealroom has a profile for this one. Try Dealroom → since 2023, posted a pre-tax loss of $95.5 million in the year to June 29, up from $74.1 million the previous year. Sales fell nearly 9%.
What could go wrong? Hilco also sought extra funding to pay suppliers, but that request was rejected because its $230 million facility is secured against shop-floor inventory and cannot cover supplier payments. David Jones has struggled to pay suppliers on time for about a year, and a 20-week payment program introduced earlier this year prompted some brands to withhold stock.
The signal: The injection is a short-term lifeline, not a growth round — it buys David Jones time to trade through its most important season while questions over leases and cash flow remain. The strain is sector-wide: rival MyerDealroom has a profile for this one. Try Dealroom → has also reported a substantial annual loss amid cost-of-living pressures.
Read more: retailbiz.com.au
Image credit: David Jones
