David Jones collapse puts $50,000 of supplier stock at risk

Daniel Okafor

Shelley Tzeegankoff said Porter Jewellery had just shipped $50,000 of stock to David Jones before the department store entered voluntary administration on Thursday. SmartCompany reported that the administration left independent brands trying to retrieve stock, reverse deliveries and seek payment on Christmas-season orders.

What changed at David Jones?

SmartCompany reported that the David Jones board handed the business to administrators and receivers on Thursday. The move put the future of the 188-year-old retailer in question, although David Jones continued trading after luxury brands began withdrawing merchandise from its shop floors.

SmartCompany reported that David Jones lender Hilco appointed Joanne Dunn, David McGrath and Christopher Hill of FTI Consulting as receivers and managers.

David Jones CEO Erica Berchtold thanked customers and business partners for “their continued support for David Jones through this period.”

She said: “We have a well-developed plan on how to reset the business for the future and will be working with the administrators, the receivers and our secured lender as we continue to pursue that reset of the business.”

How did the collapse hit smaller labels?

SmartCompany said K Juliet, a maker of premium beachwear and bathrobes, was celebrating its first orders from a major department store. The label had launched products across 18 David Jones stores only two weeks earlier.

Founder Chloe Barry-Hang wrote on Instagram: “It was such a big goal of ours to launch with a major retailer and none other than the iconic David Jones.”

She described the order as a “massive investment” that was meant to provide enough stock to last until March.

Barry-Hang wrote: “Lots of tears have been shed.”

She added: “A massive dream of ours crushed before it really began, and the reality is that we won’t see a dollar.”

Her comments show why the loss matters: one launch tied the label’s inventory and expected revenue to a single retailer.

Porter Jewellery founder Shelley Tzeegankoff shared a video claiming the brand had just shipped $50,000 of stock. The clip captured a phone call in which Porter Jewellery attempted to reverse its outbound interstate deliveries to David Jones. The call captures the scramble that followed once suppliers learned of the administration.

The exposures show the same supplier risk at two scales: K Juliet placed products in 18 stores with stock meant to last until March, while Porter Jewellery had shipped $50,000.

Stefi Kerby, founder of the upmarket candle, scent diffuser and room spray brand Celia Loves, said the administration news brought a “mix of emotions.” Kerby wrote that being stocked in “one of Australia’s most iconic retailers was an enormous milestone.”

The development, she wrote, “isn’t quite how we imagined celebrating it.” She added: “one opportunity or unexpected turn has never defined the brand we’ve built.”

SmartCompany said it had contacted K Juliet, Porter Jewellery and Celia Loves for comment.

Why are major labels pulling stock?

The withdrawals were not limited to independents. SmartCompany, citing The Sydney Morning Herald, reported that luxury labels Saint Laurent, Valentino and Oroton were among the brands pulling stock from David Jones concession stands on Thursday. SmartCompany said David Jones continued trading despite the exodus of luxury brands from its shop floors.

What happens to unpaid suppliers?

SmartCompany reported that unpaid suppliers are expected to line up in the creditors queue while four voluntary administrators from McGrathNicol examine the retailer’s finances. The appointed team comprises:

• Matthew Hutton, Jason Preston, Shaun Fraser and Jacinta Nielsen of McGrathNicol, voluntary administrators.
• Receivers and managers appointed by Hilco: Joanne Dunn, David McGrath and Christopher Hill of FTI Consulting.

What could the reset mean for brands?

Berchtold’s reset keeps two tracks running: continued trading and formal creditor administration. For smaller labels, the immediate equation has changed. They are trying to retrieve stock or reverse deliveries, while unpaid invoices are expected to enter the creditor queue.

For independents, the administration turns a Christmas stock placement into two linked exposures: goods already shipped and expected revenue tied to the retailer’s creditor process.

Continued trading gives the reset an operating business to work with. Its financial outcome now rests with the administrators, receivers and secured lender Hilco; smaller brands must resolve their exposure through stock recovery and creditor claims.