David Jones Administration: Solomon Lew and Brett Blundy among 30 parties eyeing retailer

Dozens of potential buyers are sniffing around David Jones in the hope of picking up the remnants of the failed retailer on the cheap.

The list of 30 interested parties reportedly include retail billionaires Solomon Lew and Brett Blundy, as well as New Zealand company The James Pascoe Group and a consortium led by former Myer chair Bill Wavish.

The level of interest is not unexpected or unusual, as company failures often flush out rivals and so-called tyre-kickers interested in getting a look into the financial details of the failed firm.

However, the real test will come in a few weeks when David Jones’ administrators from restructuring firm McGrathNicol ask for non-binding offers for the 188-year-old business.

News Ltd reported on the weekend that the interested parties include retailers, other private equity firms and wealthy investors.

Among their number are also said to be National Basketball League owner Larry Kestelman and British retail billionaire Mike Ashley’s Frasers Group, which is already in Australia through a major stake in the country’s biggest chain of footwear stores, Accent Group.

David Jones was put into administration by its owners, private equity group Anchorage Capital Partners, on November 5, after failed talks to reduce the struggling retailer’s rental and lease charges. The chain’s primary lender, Hilco, simultaneously appointed receivers to protect its interests.

The McGrathNicol administrators have already announced the closure of 19 of David Jones’ 38 stores by the end of the year in an effort to stabilise the group ahead of a sale or recapitalisation.

The administrators will hold their first meeting with creditors, including staff, on Tuesday, though they are unlikely to disclose the identity of interested buyers.

A second meeting is typically held about six weeks later but McGrathNicol has already indicated that it will apply to have that delayed by three months to early April to give it more time to sell the business.

David Jones was sold to South Africa’s Woolworths for $2.1 billion in 2014. Anchorage picked it up for just $100 million eight years later, thinking it could revive the business.

Companies are typically bought or restructured out of an administration by a deed of company arrangement whereby creditors accept a reduced payment to settle their debts.

The lion’s share of any cash consideration goes to secured creditors, such as Hilco.

Staff, particularly in such a high-profile case as David Jones, can expect to recover all their entitlements but trade suppliers and other unsecured creditors often bear the brunt of the losses.