David Jones went into administration 188 years after it opened in Sydney

David Jones called in voluntary administrators on Thursday. The department store chain has 38 stores and more than 5,600 staff, and it has been trading since 1838. McGrathNicol is the administrator, and FTI Consulting has been appointed receivers.

The trigger was unpaid rent. Scentre Group, which runs the Westfield centres in Australia and New Zealand, said David Jones had not paid rent since the end of September. Talks with the landlord broke down this week.

The stores stay open for now. FTI Consulting will run the business while it is restructured and put up for sale. Erica Berchtold, the chief executive, said the company has a well-developed plan to reset the business for the future.

Chart: US non-store sales climbed 174% since December 2016. Monthly sales, US non-store retailers and all US retail, each 100 in Dec 2016, to Sep 2026; all retail rose 61%. US data, as David Jones goes into administration. — This story’s chart of the day.

The backdrop is an Australian consumer under pressure. The Reserve Bank of Australia has raised its cash rate five times this year, to 4.85%. Wages are rising more slowly than prices, and house prices are falling.

Robert Crawford of RMIT University argues the model stopped working long ago. Department stores once sold convenience, service, and brands you could not buy anywhere else. Online retail took all three.

The test

who buys this. Anchorage Capital Partners bought David Jones from South Africa's Woolworths Holdings, and receivers now run it. The list of stores that survive the restructure will be the only honest statement about which ones were ever paying their way.

This story ran in The AI Unwind Friday 6 November’s edition, with the market snapshot, the other two stories, the numbers and the week ahead. Read the whole edition →

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