David Jones could disappear ‘in the very near future’, a retail expert has warned, as the department store confirmed it was reviewing its Australian store network.
Barry Urquhart, managing director of Marketing Focus, said the retailer, founded in 1838, had been steadily losing relevance for decades and now faced another battle for survival.
‘The inevitability is we will not be seeing David Jones around in the very near future,’ he warned.
David Jones confirmed to the Daily Mail that its strategy included a review of its Australian store portfolio and trading terms with suppliers and brand partners.
The retailer declined to comment on ‘speculation in the media’ but said chief executive Erica Berchtold’s priority was to accelerate its strategy.
The spokesperson added that Ms Berchtold was in advanced discussions with key stakeholders about how David Jones was adapting to the changing retail landscape.
The retailer’s primary lender, Hilco, said it had provided David Jones with additional funding and remained supportive of the business.
‘Hilco has funded above the agreed facility to allow David Jones to increase stock holdings ahead of the busy Christmas trade and sales period. Hilco remains supportive of the business,’ a spokesman said.
A retail expert has warned it is ‘inevitable’ David Jones will disappear from the high street, saying the department store has been losing relevance for decades
Changing consumer habits and the Covid-19 pandemic have put increasing pressure on retailers and high streets, Mr Urquhart said
David Jones’ financial position has come under renewed scrutiny after the retailer recorded a $95.5 million pre-tax loss for the year to June 29, 2026, as sales fell by 8.7 per cent.
Anchorage Capital Partners has been working to turn the business around, securing Hilco as a lender in July and appointing Ms Berchtold as chief executive.
However, Mr Urquhart argued that the decline in David Jones’ reported sale value reflected the extent of its problems, adding that the retailer had ‘been in trouble for some time’.
South Africa’s Woolworths Holdings bought David Jones for about $2.1billion in 2014 before completing the reported $100million sale of its operating business to Anchorage Capital Partners in 2023.
Mr Urquhart also identified the Covid pandemic as a major turning point, with widespread closures placing significant pressure on retailers.
‘With the onset of the Covid-19 pandemic in February 2020, a lot of communities, towns, businesses closed down and therefore that had a huge impact on cash flows, debt levels,’ he said.
However, he suggested David Jones’ problems also reflected a decades-long decline in the department-store model amid the rise of online shopping and specialist competitors.
‘Department stores reached their peak in the 50s, 60s and 70s, and after that there’s just been a progressive decline in relevance,’ he said.
Mr Urquhart (pictured) said department stores peaked in the 1970s and had been in decline ever since
The retailer reported a $95.5million pre-tax loss for the year to June 29, while sales plunged almost nine per cent
Mr Urquhart said David Jones had traditionally been a destination for cosmetics and perfumes but now faced competition from retailers such as Chemist Warehouse, which he said could offer comparable products at lower prices.
‘If David Jones closed today, 95 per cent of Australians would not know and would not be impacted,’ he claimed.
Mr Urquhart said David Jones had limited options to turn around its fortunes, arguing that its existing network was already too small to withstand significant store closures.
‘They’ve only got 39 stores and they’re in the size now, doing about $2 billion in turnover. You know, they’re too small to be big and they’re too big to be small,’ he said.
Mr Urquhart suggested selling selected stores to rival Myer was one possible option, but said overlapping locations could make such a deal difficult and leave David Jones with an unviable business.
‘There would have been maximum nine stores that they could have located throughout Australia and be bought by Myer,’ he said.
‘Surprise, surprise. They would have been their best performing stores. So you would be left with a shell of a company that would have been economically unviable.’
David Jones is also under pressure as several brands reduce their presence.
David Jones is also facing pressure as luxury brands including Gucci and Chanel have reduced their presence in its stores
Country Road Group has cut concessions across the network, while luxury labels including Gucci, Chanel and Dior have withdrawn some product lines or reduced their footprints.
In January, David Jones closed its stores at Castle Towers in Sydney and Tuggerah on the Central Coast.
Mr Urquhart described David Jones as ‘undercapitalised and under-resourced’ and questioned how long investors would continue funding the business without securing reliable returns.
‘How long can that survive? Investors won’t do that,’ he said.
