A small business and supplier to David Jones has shared how “incredibly disappointing” the news of the department store’s collapse is, with invoices dating back to April remaining unfulfilled.
Sydney-founded lifestyle and accessory brand Beysis told Inside Retail of its situation following reports that David Jones had entered administration and receivership on November 5.
David Jones’ distressed lenders Hilco Global appointed FTI Consulting as receivers and managers, while McGrath Nichol was appointed as voluntary administrators. The retailer’s CEO Erica Berchtold said at the time that a “well-developed plan” is in place to rescue the 188-year-old retailer, but that plan appears likely to include a sale of the company.
But for brands like Beysis, the demise of David Jones is the latest in a series of blows delivered by Australia’s beleaguered retail industry.
“We have outstanding invoices dating back to April. David Jones had negotiated strict trading terms under which we were to be paid within 14 days in exchange for giving DJs a significant discount,” Beysis co-founder Ariana Hendry said.
“We had been appealing to the finance department for an indication as to when we would be paid, but our communications fell on deaf ears. We were forced to initiate legal proceedings to recover the money owed, but we’re now facing the very real possibility that we will never see those funds.”
Hendry said that Beysis was continuing to receive restock orders, and questioned whether suppliers were being asked to fulfil orders when David Jones couldn’t meet its payment obligations.
“As a small business, we trusted that the stock we supplied would be paid for,” she added. “It’s incredibly disappointing, particularly when you consider the hard work, investment and passion that goes into building an independent Australian business.”
David Jones has been invited to respond to Hendry and Beysis’ concerns over restock orders.
The collapse, however, may not be the last for Australian retail in the run-up to Christmas. Lindsay Bainbridge of Pitcher Partners Melbourne, an administrator who recently orchestrated the revival of Betts, warned of potential pain across the industry.
“I would expect a lot of interest in David Jones, but the right buyer will be the one that can deliver the smartest bid for creditors,” Bainbridge said
“There are businesses right now who face eight weeks to decide life or death. Some of those will not be able to carry on, but others should be ready to act early and get good advice if sales are slower than they have hoped.”
Analytics firm MST Marquee has identified 12 stores likely to close, following a review of David Jones’ accounts. Five of its locations at various Westfield locations are among those expected to be on the chopping block.
