y as November 5.  The reckoning comes almost two years to the week after Mosaic Brands entered voluntary administration and its lender, Hilco, appointed KPMG as receivers and managers on the same day. Within six months, every Millers, Rivers and Noni B store had closed after a sale process failed to find a buyer. Hilco now sits behind David Jones, and Australia’s oldest department store seems to be headed down the same path.  Retail property expert Zelman Ainsworth, director of Ainsworth Property, told Inside Retail the company’s problems were not new. “David Jones’ challenges have been compounding for years. From the outside, there haven’t been notable changes to adjust their business,” he said. Stores likely to remain open – for now David Jones operates 38 stores across Australia and New Zealand, primarily in shopping centres across Australia. If administrators are appointed, they will most likely keep stores open through Christmas, close the weakest sites and shrink the physical footprint to a more profitable shape.  Stores at Westfield Parramatta, Hornsby, Southland, Woden and Carousel have been reported as under review. It’s been estimated that a third of David Jones’ store network generates 70 per cent of revenue. Hilco could also appoint receivers alongside the administrators, as it did with Mosaic Brands. Its lending is tied to inventory, so its priority is most likely converting Christmas stock into cash. If no buyer emerges, a Mosaic Brands style outcome of closing down sales in the new year becomes possible, with the David Jones name, online business and customer data potentially sold separately.  Suppliers could be stuck with excess stock, unpaid bills Suppliers and concession partners would likely rank as unsecured creditors in the administration process and could face significant losses. Mal Chia, managing director and co-founder of Ecom Nation, told Inside Retail the worst-case scenario for brands is if David Jones already holds their stock. “That means you may only get cents on the dollar. You’re at the back of the queue,” he said. The pressure on brands has been building for most of the year. David Jones has already had to offer some suppliers a 20-week repayment schedule to cover both outstanding payments and those falling due. Earlier in the year, it had also moved to pay some suppliers up to eight weeks after their goods had sold. Ainsworth said brands were no longer waiting to find out whether David Jones survives its current crisis. “We’re seeing retailers move quickly to open standalone stores in response to the unfolding situation,” he said. Traditionally, the holiday trading period accounts for half of David Jones full-year sales. Some suppliers have already begun preparing themselves for the worst. The Australian Financial Review reported that Seed Heritage, an apparel brand owned by Solomon Lew’s son Peter via Brandbank Group, is diverting its holiday period stock to its own standalone stores. Chia advised brands still holding stock to do the same. “If you’re still holding that stock, don’t send it,” he said. He suggested brands look instead to marketplaces, other department stores and their own channels. Even so, he expects brands to be left with excess inventory and that the priority should be clearing it while peak season demand lasts, rather than carrying it into the new year.  For the brands that remain, an administration could turn into a hard question about whether to keep supplying a business that may never pay them in full. Staff could face redundancies The Shop, Distributive and Allied Employees’ Association (SDA), the union for retail workers, has already begun contacting David Jones staff to outline their rights should the retailer fail. SDA National Secretary Gerald Dwyer said the reports of David Jones’ predicament were alarming, and that the union’s priorities were ensuring as many staff as possible keep their jobs and protecting all legal and financial entitlements for affected workers in the event of redundancies.  “The SDA is relieved that due to its successful advocacy the Albanese government legislated payday super reforms, which now protect affected workers from losing up to three months of superannuation,” he told Inside Retail. The reforms took effect on July 1 this year and require employers to pay super with each pay cycle, rather than quarterly.  “The SDA is reaching out to its DJs members to reassure them that we have their interests uppermost at this most distressing moment, and to reassure them that we are doing our utmost to protect their entitlements,” Dwyer said. Customers could face losses, too For shoppers, the most immediate risk is gift cards. Gift card holders are also categorised as unsecured creditors, and a new owner is not obliged to honour old cards.