David Jones slashes its retail footprint, but what happens to its 6,000 employees?

Australian department store chain David Jones is set to close 19 of its 38 stores as part of an urgent restructuring process, putting thousands of jobs at risk. The move follows the retailer's entry into voluntary administration last week, with receivers warning that the affected outlets could cease trading by the end of 2026.

According to The Guardian, receivers FTI Consulting confirmed on Wednesday that an immediate consultation process had begun for employees associated with the 19 stores identified for closure. The retailer employs more than 6,000 people across its store network.

“As part of this restructure, the receivers have commenced an immediate consultation process for all staff associated with 19 stores that have been identified for closure,” FTI said in a statement.

The receivers added that the affected stores would continue trading in the immediate term, although no final closure dates have been confirmed. However, they anticipate that the outlets will cease operations by the end of the year.

The proposed closures have raised concerns over the future of thousands of retail workers, particularly as the business continues to navigate its financial difficulties.

The Shop, Distributive and Allied Employees' Association, which represents retail workers meet the retailer's management and receivers on Thursday. The union is expected to push for affected employees to be redeployed to other locations or receive their full redundancy entitlements.

“Today these workers are receiving this terrible news through no fault of their own,” Bernie Smith, the union's national vice-president, said.

“Many members have given a large part of their working lives to David Jones and have served the company with loyalty and pride.”

The developments also come amid concerns over unpaid supplier invoices, with some smaller Australian brands reportedly owed money for stock supplied as far back as April.

As David Jones attempts to alter its operations and secure a financially sustainable future, the immediate priority remains determining the fate of its affected employees, suppliers and remaining store network.

The proposed closures cover stores across several Australian states and territories, as well as David Jones's only outlet in New Zealand.

The breakdown includes seven stores in New South Wales, three each in Victoria and Western Australia, two each in Queensland and South Australia, one in the Australian Capital Territory, and the retailer's sole New Zealand store in Auckland.

The closures largely target smaller-format outlets, while the retailer's major city flagship stores are expected to remain operational.

Under a dual appointment, FTI Consulting will oversee the retailer's day-to-day operations, while administrators McGrathNicol work towards finding a buyer or securing fresh capital to support the business.

The restructuring follows years of financial losses as David Jones struggled to maintain its position in Australia's changing retail landscape. The 188-year-old retailer has faced growing competition from online businesses and standalone premium retailers, making it increasingly difficult to sustain its traditional department store model.

The company's chief executive, Erica Berchtold, had previously told suppliers that the existing store network was no longer financially viable.

“Put simply, our store portfolio is no longer the right shape for the business, and this change is about creating a network that is financially sustainable for the future,” Berchtold said in correspondence viewed by The Guardian.