Signs of David Jones cracks surfaced months before administrators appointed
David Jones was sounding out restructuring plans nearly four months before the storied retailer was surrendered to administrators and receivers last week.
David Jones was sounding out restructuring plans nearly four months before the storied retailer was surrendered to administrators and receivers last week.
A meeting was held on July 27 between administrators McGrathNicol, representatives of David Jones’ owner Anchorage Capital Partners, including David Jones group director Simon Woodhouse, and lender Hilco Capital to discuss the retailer’s financial performance and potential restructuring scenarios. Yet there was no further engagement until late October.
The timeline was revealed in documents published late on Tuesday for creditors, which revealed a meeting in late October — just a few days before David Jones’ eventual collapse — discussed the potential for voluntary administration.
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By continuing you agree to our Terms and Privacy Policy.David Jones boss Erica Berchtold did not meet with McGrathNicol until October 28, when contingency planning took place.
On November 4, a day before David Jones’ collapse, Mr Woodhouse spoke to administrator Shaun Fraser on two occasions, when he requested McGrathNicol to provide draft appointment documents for a board meeting the following morning.
But the documents also revealed Anchorage was alert to the possibility of David Jones’ collapse as early April, when McGrathNicol was engaged by law firm Corrs Chambers Westgarth — acting on the behalf of Anchorage — to review and analysis of limited financial information relating to David Jones.
Australian and overseas suitors are now circling David Jones, with the administrators setting a Friday deadline for expressions of interest.
McGrathNicol estimates the voluntary administration will cost about $4m to $4.5m to complete, subject to a number of variables.
The first creditors’ meeting will be held next Tuesday. Administrators said they would seek additional time to pursue a sale or recapitalisation, with a key second meeting to decide on David Jones’ future potentially pushed back by three months.
The second creditors’ meeting is usually held within six weeks of administrators being appointed.
