Half of Australia's oldest department store is about to go dark. Nineteen of David Jones's thirty-eight stores are on the receiver's closing list. This is Fashion Business Daily for Wednesday, November 11. After David Jones, Tod's is suddenly without a creative director, and Reuters visits Indian garment factories that are pulling back from America. Hit follow and you won't have to come looking for the next episode.
Emilia Terzon, Stephanie Chalmers, Liana Walker and Michael Atkin, for ABC News:
In a letter to suppliers, David Jones said: "We expect the affected stores to continue trading through the peak seasonal period, with closure dates anticipated to occur later in the year."
This is a decision, not a forecast. The receiver is FTI Consulting, acting for secured lender Hilco, and it confirmed the closures on Wednesday, Australian time. The ABC has also seen the correspondence to staff and suppliers. New South Wales loses seven stores, Victoria and Western Australia three each, Queensland and South Australia two each, plus Woden in Canberra and Newmarket in New Zealand. The chain has about six thousand employees. And closing after the holidays is a choice. Keep the doors open through the busiest weeks, discount the stock or send it to other stores, then shut. Shoppers get a sale and staff get a consultation process. Chief executive Erica Berchtold told employees the store portfolio is no longer the right shape for the business. Maybe so, but the people on those shop floors didn't choose the shape. Compare it with what we reported last Friday. MST Marquee expected five of the seven Queensland stores to close. The actual list has two, Robina and Sunshine Plaza, so the Brisbane CBD store at QueensPlaza survives this round. That's how far apart an analyst's projection and a receiver's list can be. Barrenjoey's Tom Kierath told the ABC that buyers will probably want a handful of sites, not the whole business. He pictures a slimmer David Jones built around flagships, with more food and drink and more reasons to stay. I'd add that a smaller store still needs brands people actually want. The ABC says concession shelves were stripped of stock last week, which shows you how nervous the brands are. The calendar is tight. Creditors have until Monday to lodge proof of debt, and the first creditors' meeting is Tuesday. McGrathNicol, the administrator, plans to ask the New South Wales Supreme Court for more time to run a sale or recapitalisation, and only days remain for expressions of interest. Scentre Group, which owns Westfield, says David Jones hasn't paid rent at its centres since September.
Madeleine Schulz, writing in Vogue:
In a release shared by Tod’s Group, which owns Tod’s, Hogan and Roger Vivier, the company said that the exit is in line with its decision to “embark on a strategic direction aimed at more decisively communicating the brand’s values, the distinctive character of its codes, and the artisanal quality of its products, as well as the Italian lifestyle”.
Matteo Tamburini is leaving Tod's. The company announced it on Tuesday, so this is confirmed. No successor has been named, and none of today's reporting points to a frontrunner. Tamburini joined in December 2023 from Bottega Veneta, where he was head designer for ready-to-wear, after stints at Emilio Pucci and Schiaparelli. FashionUnited notes he succeeded Walter Chiapponi. His debut was the fall-winter 2024 collection in February 2024, and his spring-summer 2027 show in Milan in September was his last. Less than three years, and Diego Della Valle's thank-you reads like a reference letter. That strategy line bothers me too. Talking up the codes, the craft and the Italian lifestyle is what a company says when it wants the brand to be the star instead of the designer. And Tamburini's first show was praised for respecting the house codes. So what exactly is supposed to change? The numbers are hard to read. Tod's Group delisted in May 2024 in a deal with private equity firm L Catterton. Its last public results were for 2023: revenue up 11.9 percent to 1.13 billion euros, and the Tod's brand up 10.4 percent. Since then, Vogue says, the economy has gotten tougher and Chinese demand has softened further. With no public figures since the delisting, I can't tell you whether the product was the problem. Vogue calls this yet another empty design job at a luxury house. Balenciaga filled its seat in a day last week. Tod's hasn't given a timeline. If the brief is just the codes, maybe they think the job is smaller than it is. Maybe. Or the Della Valle family wants a different kind of designer. Until Tod's names someone, all we know is the exit and the direction it says it wants.
Reuters, reporting from Ranchi in eastern India:
Orient Craft has since moved sales to Britain, Europe and, to a lesser extent, India. The US now accounts for less than 10% of sales, down from 84% before the tariffs, with annual exports of about 1.5 billion rupees ($15.82 million).
Orient Craft, founded by Sudhir Dhingra, makes clothing for Next and Marks and Spencer. It used to send most of its output to the US, to customers including American Eagle and Gap. US tariffs on Indian goods went as high as 50 percent last year. Reuters says they now stand at 10 percent under Section 301 on top of base tariffs of 6 to 12 percent. They've come down, and Dhingra still doesn't trust them. Even with a trade deal, he asks, what guarantee is there that it holds? This is the part that gets me. Dhingra says that after the April 2025 tariff announcements, some US buyers asked suppliers to absorb 25 percent of the duty, when their margins are under 10 percent. That's his account, not the brands'. But if it's accurate, American retailers asked factories to cover their tariff bill. No wonder those factories are looking for other customers. We heard the start of this on Monday, October 26, when Gokaldas Exports talked about growing in Europe. Reuters now has the targets. Gokaldas, with more than 53,000 employees, wants Europe at 25 to 30 percent of revenue within three to five years, up from 15 or 16, and the US down to 35 to 40 percent from 50 to 55. Its managing director says it's not a temporary shift. The trade data points the same way. From April to August, the Global Trade Research Institute says, India's textile, apparel and home-furnishing exports to the US fell 9.8 percent to 4 billion dollars, while exports to other markets rose 3.7 percent to 15.2 billion. Trade deals are helping. Indian clothing has entered Britain duty-free since the India-UK agreement took effect in July, and an EU agreement could remove duties of 12 to 17 percent. The exporters' council names Germany, France, Italy and the Netherlands as targets. Factories are also moving to Ranchi for subsidies and easier access to land. Gokaldas claims a 10 percent efficiency advantage there and plans a third plant with up to 4,600 jobs. For American brands, this comes down to capacity and leverage. Exporters told Reuters they won't abandon the US, but they don't expect it to regain its old dominance even if duties fall. If India's big suppliers fill their lines with European orders, US buyers will find less room in those factories and less patience when they ask for discounts.
Do you have a tip, a correction, or a store closing in your town that we should know about? Write to fashionbusinessdaily at lantern podcasts dot com. A person reads every note.
That's Wednesday's Fashion Business Daily. I'm watching who bids for what's left of David Jones. And Tod's next hire. The show comes to you from Lantern Podcasts. See you Thursday.