Australia's oldest retailer enters administration after 188 years

Australia’s oldest retailer, David Jones, has entered voluntary administration after 188 years, citing rising costs, sluggish retail sales and supply chain pressures.

The department store chain is one of Australia's most recognisable brands and predates London's Harrods by more than a decade.

It employs about 6,000 staff across 38 stores in Australia and New Zealand.

The retailer now joins other Australian firms that have restructured, cut jobs or closed as they struggle with the impact of high fuel costs and a slowing economy.

David Jones stores will continue to operate under the control of FTI Consulting, the appointed receivers, while the firm reviews its operations.

McGrathNicol has been appointed as voluntary administrators.

"A transaction process seeking offers for a recapitalisation of the business or a sale as a going concern will commence immediately, and will be managed by McGrathNicol," FTI Consulting and McGrathNicol said in a joint statement.

"We will manage this process carefully, mindful of the impact on some stakeholders but also recognising the need for difficult decisions."

Founded in Sydney in 1838 by Welsh immigrant David Jones, the retailer describes itself as the world's oldest continuously operating department store.

For generations, Australian shoppers have turned to David Jones for clothing and accessories for milestone occasions, from formal wear to school and graduation attire.

However, like its counterparts overseas, the retailer has struggled for more than a decade with the shift to online shopping and growing competition from fast-fashion chains.

David Jones CEO Erica Berchtold said the company would work with its administrators, receivers and secured lender during the voluntary administration process, Australia's closest equivalent to Chapter 11 bankruptcy in the US.

Luxury US department store owner Saks Global, which battled similar retail trends, emerged from Chapter 11 in June after nearly five months with fewer than half of its previous stores and a quarter of its debt.

Scentre Group, which owns and operates Westfield shopping centres in Australia and New Zealand, offered a lifeline to David Jones, but it was rejected by chain owner Anchorage Capital, ABC News reported, citing Scentre CEO Elliott Rusanow.

David Jones has stores at 17 Westfield locations.

In a statement to the Australian Securities Exchange on Wednesday, Scentre said David Jones had paid rent up to September 30.