‘Still no payment’: David Jones suppliers vent after collapse

David Jones suppliers have taken to social media to highlight their financial plight, saying they have sent goods worth tens of thousands of dollars to the collapsed department store.

The receivers have indicated they take no responsibility for paying suppliers with claims from before David Jones collapsed.

The retailer is still accepting gift cards despite its collapse into administration on Thursday, but the company’s new managers would not say for how long.

“At this stage, David Jones continues to trade as normal, with the Receivers continuing to operate the Group on a ‘business-as-usual basis’, as far as possible, while the Group’s position and available options are assessed,” the receivers from FTI Consulting told suppliers in a circular provided after their appointment on Thursday.

Some brands have stripped their products from David Jones’ shelves. Louis TreriseAdvertisementThe main issue for shoppers is working out what they can actually buy, as suppliers and brands that operate the mini-stores within David Jones – called concessions – continue to strip shelves of their stock amid worries they will not be paid.

Shoppers report shelves still being emptied in David Jones’ Kotara store in Melbourne as well as Sydney’s Warringah.

Sydney Jewellery designer Shelley Tzeegankoff posted a video on TikTok of her attempting to retrieve $50,000 worth of earrings, rings, bracelets and necklaces that she shipped to David Jones on the morning of its collapse.

The post is labelled, “POV: David Jones just went into administration your brand shipped them $50k worth of stock this morning.”

Jacob Leung, co-founder of homewares group Slowdown Studio, said the business was now $75,000 out of pocket.

“We got this great order from David Jones about a year ago, and then they put in a second order more recently. That second order arrived to them three weeks ago, without payment terms. That was meant to get paid on Monday, the Monday we just had. Still no payment. And then today, this in the news,” Leung said in an Instagram post on Thursday.

“What really frustrates me about this whole situation is that we had to bend over backwards for them. They told us payment terms. They told us ‘this is the discount you need to give us’. We had to pay for shipping. They wanted customised packaging. We had to go above and beyond, and this is how we are paid, with nothing.”

The administration process protects the company from creditors seeking to get their money back.

In the note to suppliers, the receivers from FTI Consulting said they are not going to pay any liabilities that predate their appointment.

“Suppliers with claims arising before the appointments may be unsecured creditors of David Jones,” they said.

“All properly incurred post-appointment trading invoices will be paid by the Receivers in accordance with existing trading terms.”

Unsecured creditors are not expected to be paid the full amount they are owed as they rank behind David Jones’ financier, Hilco Capital, and employee claims in the payment queue.

The private equity group that owned David Jones, Anchorage Capital, has already flagged plans to make a bid for the business once the restructuring – which will involve store closures and mass lay-offs – is completed by the receivers.

A source representing other suppliers, who did not wish to speak publicly given the sensitive situation of David Jones owing them money, said suppliers were worried they wouldn’t get paid for stock currently in the hands of the retailer and were pulling out.

“It’s like ram raids,” they said of the scramble to withdraw stock.

Gucci, Scanlan Theodore, Yves Saint Laurent, Viktoria & Woods and Oroton were among dozens of designer brands deserting their concession stores after David Jones staff were told on Thursday morning that the retailer had collapsed.

But one of the concessionaires could not understand the logic of removing stock now.

“To me, it’s quite bizarre. All of these concessions taking all their stock out because it’s their stock, they own it; and from today everything you sell through their system goes to you,” they said while also requesting anonymity as David Jones is late with its payment to them.

On Thursday morning, David Jones’ chief executive Erica Berchtold and board directors handed the reins of the business to voluntary administrator McGrathNicol, which will run the sale process for the retailer, while FTI Consulting has been appointed receiver and will handle the company’s operations.

FTI declined to say when it would offer an update on a restructure that is expected to close dozens of stores and lead to the group shedding thousands of staff.

David Jones currently employs nearly 6000 workers, and store closures will have a significant flow-on effect for landlords which tend to have Coles, Woolworths, David Jones and Myer as anchor tenants in the major shopping centres.

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