David Jones’s administrators have revealed they reviewed its finances six months ago and discussed restructuring the retailer three months before it fell into administration.
The new timeline raises questions over the department store group’s decision to keep buying new products and fall months behind in payments to some brands before it revealed last Thursday it could not pay its debts.
The process could leave unsecured creditors with substantial losses, with unpaid product suppliers and shoppers holding unredeemed gift vouchers most at risk.
The McGrathNicol administrators invited David Jones’s creditors, which also include employees and landlords, to attend a ۱۷ November meeting in its first circular on Tuesday.
McGrathNicol’s team said it had been engaged by the lawyers for David Jones’s owners, Anchorage Capital, as early as April ۲۰۲۶ to analyse some of the department store group’s financial information, though it said it did not directly advise the group or review its ability to pay debts.
By July, David Jones’s group director, Simon Woodhouse, and its biggest lender, Hilco, met McGrathNicol to discuss David Jones’s financial performance, “potential restructuring” and to form a working group to regularly discuss the issues.
But the administrators said Woodhouse left the meeting when the “potential restructuring” was discussed and no working group was formed.
At the same time, David Jones was putting small suppliers on tiered and extended payment terms, with brands forced to accept ever-deeper discounts to get faster payments, according to several businesses contacted by Guardian Australia.
McGrathNicol said it did not discuss David Jones’s dire financial position again until ۲۲ October, when Woodhouse asked them to help plan a for potential voluntary administration.
It said Woodhouse and others held another five meetings in the following fortnight before a series of briefings last Wednesday, the day before the administration was announced, as the company negotiated with its landlords and prepared for collapse.
McGrathNicol said David Jones Group paid it $۱m upfront that day to run the administration. It told creditors it expected to access another $۳m to $۴m of funding.
The first creditors’ meeting will take place on ۱۷ November, McGrathNicol said.
A second meeting is typically required six weeks later but McGrathNicol said it would apply to have that delayed another three months, or to early April ۲۰۲۷, to give it more time to sell the business or raise more funds.
The letter did not offer more detail on David Jones’s financial situation, or how long it had been insolvent. McGrathNicol said it had asked the company’s directors to prepare a report on their business, property and financial circumstances.
FTI Consulting, which is running David Jones’s day-to-day business during the administration process, on Monday said the company had remained fully operational.
Anchorage Capital, David Jones and Hilco were contacted for comment on Tuesday night.
