The collapse of David Jones is expected to deliver a major blow to Brisbane’s retail centres across the city and further compound the sector’s struggles in the ailing Queen Street Mall.
asserted
collapse → expect → Mall
David Jones was handed over to administrators and receivers on Thursday, for the first time in its 188 years of trading, after its board voted to appoint voluntary administrators from McGrathNicol.
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board → hand → McGrathNicol
The failed retailer’s lenders appointed FTI Consulting as receivers to the group, who will run the business until it is restructured and put up for sale.
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it → fail → sale
The store was busier than usual on Thursday afternoon, both with people hoping to use their gift cards while they still could and with staff pulling down displays.
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staff → hop → displays
In the shoe section, brands including Steve Madden, Kurt Geiger and Dune had empty displays.
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brands → include → displays
A shopper told this masthead they had attempted to buy a pair of shoes but had been told by a staff member they were no longer able to be sold.
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they → tell → member
Analysis by financial services firm MST Marquee identified all but two stores in Queensland as facing closure.
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Analysis → identify → closure
MST Marquee expected all stores bar Chermside and Pacific Fair would close.
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stores → expect → Chermside
However, QUT professor and retail expert Gary Mortimer said he believed the CBD store would remain open.
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store → say → ?
“There’s been no official announcement yet on which stores will close in Queensland,” he said.
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he → close → Queensland
That would be a store I would imagine would remain.”
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I → imagine → ?
Mortimer said several stores that had undergone substantial redevelopment, such as Sunshine Plaza and Pacific Fair, would be less likely to close.
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that → say → Plaza
“I think there’s a future for this brand,” he said.
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he → think → brand
The older shopping centres may be less attractive, Mortimer said.
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Mortimer → say → ?
Previously, Myer stores have been replaced by retailers such as Kmart, Target and TK Maxx that are large but not big enough to fill the entire space.
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that → replace → space
A closure of the David Jones in QueensPlaza would leave the CBD without a department store, after Myer vacated the old Myer Centre – now known as Uptown – in July 2023.
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Myer → leave → July
Vicinity Centres owns both QueensPlaza and Uptown, after it completed a takeover of the latter earlier this year.
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it → own → latter
In its ASX announcement, Vicinity said it “maintains contingency plans for each of its David Jones locations and routinely assesses alternative uses for major tenancy space as part of its asset planning”.
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it → say → planning
The company said in February the revitalised Uptown would combine fashion, dining, technology, leisure and entertainment stores, and would mirror the Emporium in Melbourne’s CBD.
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Uptown → say → CBD
It estimated the redevelopment would cost $300-$350 million – funded through debt and the sale of other assets – and would be completed by 2029.
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redevelopment → estimate → 2029
However, the mall is haemorrhaging retailers – though burger restaurants are going strong – while more retail space is simultaneously being developed.
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space → haemorrhage → retailers
Lord Mayor Adrian Schrinner’s concern for the state of Uptown late last year prompted him to write to the chair of Vicinity, expressing what many of his constituents felt about the giant hole left by Myer’s closure.
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many → prompt → closure
He asked to meet with Vicinity to discuss its plans, and said the site lacked the vibrancy and amenity expected of such a significant address in one of Australia’s busiest pedestrian malls.
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site → ask → malls
IFM Investors, who sold their shares of Uptown to Vicinity, are currently redeveloping the Wintergarden, Intercontinental Hotel and 150 Elizabeth Precinct.
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who → sell → Wintergarden
The proposal would replace the existing Wintergarden shopping centre with a six-storey retail podium topped by a 45-storey hotel, residential tower and a 16-storey office tower.
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proposal → replace → hotel
Mortimer said there was an excess of retail space in the CBD, while locals have moved to centres such as Carindale and Chermside for their shopping.
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locals → say → shopping
“We don’t go into the CBD to shop any more, unless it’s for that luxurious experience which you get at QueensPlaza and Edward Street,” he said.
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he → go → QueensPlaza
“I think Wintergarden is well positioned to leverage that market, so I do think we will see a redeveloped Wintergarden.
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we → think → Wintergarden
“But of course that then creates some challenges for Uptown, which appears to have still not made any investment in that centre.”
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which → create → centre
Rumours have swirled for years about a possible Myer comeback in the CBD, but none have eventuated, so exactly who would occupy all this retail space is up in the air.
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who → swirl → air
Mortimer said he would like to see Uptown, which has direct access to a bus station and plenty of parking, reinvigorated as a health services centre to accommodate workers and the growing number of people living centrally.
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which → say → people
David Jones’ collapse was triggered after the department store operator’s private equity owners failed to reach a deal with major landlord Scentre Group on store closures and its rent bill.
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owners → trigger → closures
Scentre Group, which operates Westfield Carindale and Westfield Chermside, rejected a restructuring proposal put forward by David Jones.
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which → operate → Jones
A counter-proposal by Scentre was subsequently rejected by David Jones’ board of directors on Wednesday.
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proposal → reject → Wednesday
Scentre Group chief executive Elliott Rusanow said David Jones had not paid rent since October and “therefore are in breach”.
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Jones → say → breach
Rusanow said its offer would have facilitated the continuation of David Jones trading.
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offer → say → trading
“That offer has disappointingly been rejected by them,” he said.
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he → reject → them
In its ASX announcement, Vicinity identified David Jones as having an outstanding rent bill of approximately $2.2 million as of October 31.
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Vicinity → identify → October
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