'If they're winning, we're winning': Suppliers on David Jones closures - ABC News & Headlines – Australian Broadcasting Corporation

David Jones has announced plans to close half its stores.  (ABC News: Fletcher Yeung)

David Jones's receivers are set to close 19 of its 38 stores.

Suppliers say they are sad but supportive of the decision.

The affected stores are expected to continue trading through the peak seasonal period.

While news of David Jones's plans to close half of its stores may sadden some customers, some suppliers say a streamlined operation could boost sales by attracting more shoppers into fewer, higher-performing stores.

The 188-year-old department store went into administration last week.

On Wednesday, its receivers announced plans to close 19 of its 38 stores.

Owner of Spice brand Lord and Lion, Eresha De Zoysa, whose products have been stocked across the David Jones network for five years, said she was concerned the closures would wipe out a significant amount of her business.

"The way that we were able to access people in communities that we ordinarily would not be able to access was by David Jones," she said.

"So even though, on the whole, those stores may not make commercial sense for Anchorage to keep or David Jones to keep … our brand did really well, and we were successful in those stores.

"It's a sad day, but I think we just have to be a bit more clever in how we're going to access [those customers]."

Eresha De Zoysa says she is grateful to be stocked in David Jones.  (Supplied)

Documents seen by the ABC show an uncertain future for suppliers that have been asked to continue supplying the store despite unpaid debts.

Ms De Zoysa, a former corporate lawyer who has worked in administration and previously advised David Jones, said she had no doubt a restructured David Jones would succeed and thrive.

"I do hope that the suppliers find a way to renegotiate an outcome with David Jones to continue supplying into the future because it is actually those brands that make David Jones worthwhile," she said.

McGrath Nicol has been appointed administrator for David Jones, but separately FTI Consulting has been appointed as receiver for the company's biggest lender, Hilco.

An email sent to suppliers from David Jones chief executive Erica Berchtold, seen by the ABC, said the store portfolio was "no longer the right shape for the business" and the change was about "creating a network that is financially sustainable for the future."

It said the last day of trade for the 19 stores marked for closure was anticipated for later in the year, with the stores expected to continue trading through the peak seasonal period.

David Jones will close 19 of its 38 locations.  (ABC News: Daniel Irvine)

"The business could not continue operating as it was. We had a plan to reset the business, and we still have a plan to reset the business," the email said.

Carlos Martins, owner of men's fashion brand Coast Clothing, said the store closures were the "right way forward".

"Fewer stores will be better for me in the long term," he said.

"Loyal customers will likely shift to online shopping, which will bring greater exposure to my brand, compared to instore where we didn't have a presence."

Slow Down Studios owner Jacob Leung.  (ABC News: Fletcher Yeung)

Jacob Leung, owner of handwoven blankets business Slowdown Studio, which is not stocked in the closing stores, said although the news was sad, it was good for suppliers.

"It's going to have a massive impact on all of those employees, as well as the communities of the stores that are closing down," he said.

"We only want the best for David Jones because if they're winning, that means we're winning.

"At the end of the day though, it's clear that the business model that David Jones currently operates in is not working, and that's why we are all in this situation."

David Jones in Claremont in Perth's Western Suburbs is one of the stores continuing to trade.  (ABC News: Zahra Anwary)

Mahala Joyce, co-founder and director of distribution business Over The Fence, has organised pop-ups in David Jones flagship stores for international brands, including Bellroy and Topologie.

Like other suppliers, he said he had negotiated 14-day settlement terms that came with a 5.75 per cent discount. Yet across three purchase orders over six months, he said none was paid on time, while the discount was still applied. Relevant documents have been seen by the ABC.

"Essentially the way that their system is set up is it's set up that those discounts are applied at the start, prior to any payment date," he said.

Mr Joyce said the decision to close David Jones stores was the right move.

"It was broadly known that there were a number of locations, about 19, that were loss-making. And a lot of the people that I spoke to in that business thought that if they had 12 stores in the long run, that that would be a very solid business for them to be able to kind of go forward with."

However, he said David Jones needed to focus on fixing its customer service.

"They can close stores, they can repair relationships with vendors, but until they actually start delivering on the promise, like the service promise that their brand has developed in Australia, even with the store closures, I think it's going to be a tough market for them.

"But if they can deliver on those promises that consumers expect from them, then I think they can be a really strong player in the retail landscape."