A lender with the right to pull the plug on a department store that's been trading for nearly 190 years just put more money in instead, so the shelves are full for Christmas. That's David Jones as of Monday. Whether the extra money is a lifeline or a last chance depends on who's talking. This is Fashion Business Daily for Tuesday, October 27, with three stories. The Australian Financial Review reports that David Jones's directors are weighing the company's solvency. Marc Jacobs's new owners hand Greater China to the Hong Kong retailer I.T Group. And Debenhams, the British group that owns Boohoo, posts its first pre-tax profit since 2021.
Richard Wood, writing for Nine and following up a report in the Australian Financial Review:
Hilco has the green light to proceed because David Jones broke a loan covenant, according to two people briefed on the issue who asked to remain anonymous because they were not authorised to comment.
First, the sourcing. The covenant breach comes from two unnamed people who spoke to the AFR's Street Talk column, which published on Monday. Hilco Global is a British special situations investor and has been David Jones's main lender since July. It hasn't confirmed a breach. A Hilco spokesman says it has funded above the agreed facility so David Jones can increase stock holdings before Christmas, and that Hilco remains supportive of the business. Nine says the extra capital went in last week. So Hilco could have called in the loan and lent more instead. Either it believes in the turnaround, or it wants the Christmas stock sold before it decides anything. That second part is your reading. Hilco's own word is supportive. But the AFR also reported last month that Hilco had lined up restructuring advisers at McGrathNicol and Clifford Chance in case things went wrong. Nine says the lender may decide to wind the company up. That's an option being reported. Nobody has said it's been decided. Meanwhile the brands are leaving. Per Nine, Country Road, Witchery and Mimco are among those looking to scale back, and Gucci, Chanel and Christian Dior have already shrunk their space. A department store is basically a landlord for brands. Once the names people actually come in for get smaller, foot traffic follows them out. The reported numbers are consistent with that. Nine cites a pre-tax loss of 95.5 million dollars, with sales down almost 9 percent. Anchorage Capital Partners, an Australian private equity firm, has run David Jones since 2023. The stores at Castle Towers in Sydney and Tuggerah on the Central Coast closed in January. Nine says it contacted Anchorage, which hadn't commented by publication. Earlier this year, Macquarie University retail historian Matthew Bailey called it a slow decline. Younger shoppers buy online, and the store's traditional customers are heading into retirement and spending less. I'd add one thing. What can you buy at David Jones that you can't get somewhere else? I don't think there's a good answer anymore. So the next two months are the test. Hilco has paid for the Christmas inventory. If it sells through at decent margins, the restructuring gets more time. If it doesn't, the advisers are already lined up. For the brands that sell through David Jones, the question is whether to cut their concession space now or wait until January.
Jennifer Braun, reporting for FashionNetwork:
Under the agreement, I.T Group has acquired the existing Marc Jacobs operating business in Greater China and entered into a new long-term licensing agreement.
This one is signed, and the structure matters. It's a license, not a distribution contract. WHP Global and G-III Apparel Group, the brand's owners, announced it this week. I.T Group takes over the Marc Jacobs business that's already operating there. It then grows the brand through standalone boutiques, shop-in-shops, e-commerce and wholesale across mainland China, Hong Kong, Macao and Taiwan. And on paper I.T is the right partner. It was founded in Hong Kong in 1988, it has more than 280 points of sale, and its digital platform carries over 400 labels. The brands it brought into that region include A Bathing Ape, Comme des Garçons, Acne Studios, Carhartt WIP and Off-White. That's a serious streetwear and designer resume. Marc Jacobs fits on those shelves. Some ownership background, from Worthbury, a briefing site summarizing WWD's report. LVMH completed its sale of Marc Jacobs to WHP and G-III on September 1, for roughly 925 million dollars. Each owns half the brand, and G-III also bought the operating business, which is mostly in the US and Europe. This is the first China move under the new owners. And neither side has said how many boutiques are planned, what sales they expect, or when the first stores open. That's how brand management works. You own the name, license out the territories, and let a local operator take the risk on stores and stock. Founder and chairman Sham Car Wai says I.T sees significant potential to accelerate growth. Which is what everyone says on signing day. The management team is changing at the same time. Eric Marechalle, chief executive for nine years, leaves at the end of this month. Emily George, who G-III had named president of direct-to-consumer for North America, becomes global president on Sunday, November 1. Marc Jacobs himself remains creative director. That's the part I watch. While he's designing, the product holds. The danger with brand managers is later, when the name starts showing up on things he's never seen. The timing is worth noting too. LVMH, Kering and Hermès all pointed to weak Chinese demand in their third-quarter results this month. Putting the region in a licensee's hands means I.T carries the store leases and the inventory, and the owners collect royalties whichever way the market goes.
From Modaes Global, on the Debenhams group's half-year results:
This was the first time the British conglomerate had posted a pre-tax profit since 2021, and it was in 2025 that the group launched a transformation plan to address the situation.
These are the company's own figures for the six months to August 31. Pre-tax profit was 28.3 million pounds, compared with a loss of 17.9 million a year earlier. Gross merchandise value, meaning the total value of goods sold across its platforms, rose 1.8 percent to 863.8 million pounds. Revenue fell 3 percent to 409.6 million. Revenue's down and they're back in profit. Walk me through that. It's mostly margin and lower one-off costs. Gross margin rose 2.2 points to 54.1 percent. Exceptional costs fell 82.4 percent to 4.3 million pounds. Gross profit itself only rose 1 percent, so most of the swing from loss to profit came from spending less below that line. Modaes puts EBITDA at 24 million pounds. The split by brand is the interesting bit. The Debenhams brand grew 14.1 percent to 363.8 million pounds, the strongest in the group. The Man brand fell 28 percent to 79.8 million, from 110.9 million a year earlier. The department store name is outselling the fast fashion now. Be careful with that comparison. Modaes doesn't give separate figures for Boohoo or Pretty Little Thing. What the company does say is that the recovery continues at a steady pace. Steady is a generous word for revenue down 3 percent. Cutting costs gets you one profitable half. Product people want to buy is what gets you the next one. Agreed. This half doesn't include Christmas, and the second half will show whether revenue has stopped falling. It's also a contrast with our first story. David Jones is losing the brands that fill its floors. At Debenhams, the old department store name is the part that's growing.
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Three things on our list. Christmas sell-through at David Jones, the first I.T openings for Marc Jacobs, and whether Debenhams can grow revenue again. You've been listening to Fashion Business Daily, a Lantern Podcast. We're back tomorrow, Wednesday. Pay full price for something good this week.