As of 1 November 2026, the most consequential retail story in Australia is not a new format or a new app. It is a 188 year old department store deciding how many doors it can still afford to keep open. The Australian Financial Review reported that David Jones needed 10 million dollars in emergency funding from its lender Hilco to secure enough stock for Christmas, that it had breached a lending covenant and missed payments to some concession operators, and that chief executive Erica Berchtold is reviewing plans that could cut the 38 store network by more than half.
What the numbers say about the network
The easy explanation is that the retail landscape changed, and it did. But Myer competes on the same court with the same customers, so the landscape explains almost nothing about the gap between the two. What the reporting describes is a network that kept extracting from its brand relationships at the exact moment it needed to invest in them. Suppliers were asked in August to accept a 20 week repayment programme covering both outstanding payments and those falling due in the meantime.
The consequences are visible in who stayed and who left. Accent Group stopped supplying in July and now delivers only on cash-on-delivery terms. Effie Kats, Acler, Significant Other and Aston Studios have moved to exclusive department store arrangements with Myer. Country Road Group is pulling nearly 100 of its 283 concessions next year, and some suppliers have reported since March that they could not obtain trade credit insurance for stock sent to David Jones.
Why concession exits are a store selection signal
A department store runs on borrowed trust
Customers believed in David Jones partly because the best brands chose to be there. When those relationships turn extractive, brands withdraw their best products, people and launches first, and shoppers feel the difference on the shop floor even when they never see a payment dispute. They simply see a store that no longer stocks the things that made it worth the trip, and they stop treating it as the default.
The default only lasts while it is earned
Every brand starts as an emotional default, chosen for a feeling, reinforced by repetition until it becomes a cognitive default. Coles for groceries, JB Hi-Fi for home technology, and for a very long time David Jones for anything that mattered. The mistake was assuming that default was permanent. A store selection process that only ranks locations by catchment income and passing traffic will keep every door open long after the assortment that justified it has gone.
Refits do not answer the reason to visit
The retailer spent 250 million dollars refurbishing stores, launching an app, upgrading e-commerce and relaunching its loyalty programme. Walk through Bourke Street or Chatswood Chase and you can see where the money went. What the spending improved was how customers shop. What it never answered was why they should shop there, and that is a merchandising question rather than a property question.
Network options and what each one tests
| Option | What it protects | What it puts at risk | Evidence to collect |
|---|---|---|---|
| Keep all 38 stores | Coverage and brand presence | Cash and supplier confidence | Contribution margin by store |
| Cut the network by half | Cash and stock funding | Catchment loss and local loyalty | Trade area overlap between stores |
| Convert to concession model | Fixed cost base | Assortment control | Concession sales per square metre |
| Exit marginal regions | Operating focus | Wholesale relationships | Supplier terms after exit |
The second row is where the reported review is heading, and it is the hardest to execute because catchment loss is not linear. Two stores that look redundant on a map may serve different shopping missions, and closing one can push a customer to a competitor rather than to the surviving branch. The evidence that matters is contribution margin by store combined with trade area overlap, not total sales per door.
What a store review should document
The first document is a contribution margin table by store, built after allocating rent, labour and concession support rather than before. The second is a trade area overlap map that shows which catchments are genuinely duplicated and which only look close on a map. The third is a supplier exposure list, because a store network that loses its best brands loses the reason customers came, and that loss shows up in sales before it shows up in any property decision.
There is also a timing constraint that the reporting makes obvious. Emergency funding to secure Christmas stock means the decision window is measured in weeks, not quarters, and a review that waits for a full year of data will arrive after the assortment has already thinned. The practical approach is to run the margin and overlap analysis on the last four quarters, mark the confidence level of each store level number, and treat the result as a screening list rather than a final answer.
FAQ
How large is the store network being reviewed?
David Jones currently operates 38 stores. The Australian Financial Review reported that chief executive Erica Berchtold is reviewing plans that could cut that network by more than half, alongside 10 million dollars in emergency funding from lender Hilco to secure Christmas stock.
Why did suppliers start leaving before any store closed?
Because payment behaviour changed first. Suppliers were asked in August to accept a 20 week repayment programme, Accent Group stopped supplying in July and now delivers only on cash-on-delivery terms, and some suppliers reported being unable to obtain trade credit insurance for stock sent to the retailer since March.
Does a store refit fix a weak assortment?
No. The retailer spent 250 million dollars on refurbishment, an app, e-commerce and a loyalty relaunch, and the stores look better for it. But improved shopping experience does not answer why a customer should choose the store, which is a merchandising question about brands, exclusivity and price position.
What evidence should a store closure decision rest on?
Contribution margin by store after allocating rent, labour and concession support, combined with trade area overlap between locations. Total sales per door is a misleading metric because two stores that look redundant on a map can serve different shopping missions.
