David Jones hosted Queen Elizabeth II and Dior – but nostalgia won’t save it

As a freshly crowned 27-year-old, Queen Elizabeth II surely did not mean to cause a crowd crush during her first visit to Sydney when more than a million Australians spilled onto the streets with gay abandon to catch a glimpse of England’s reigning monarch.

Mounted police formed a barricade outside David Jones and charged at onlookers jostling to get a glimpse of Her Majesty, dressed in a gown of gold-tinted tulle embroidered with thousands of Australian golden wattles made of gold and yellow beads, as she slipped into the David Jones store on Elizabeth Street to be whisked away for the State banquet dinner on the seventh floor.

The royal visit on February 4, 1954, came in the midst of the golden era for global department stores, then destinations in themselves. It was a point of immense civic pride for the nation to have David Jones (decked out that day in a 30-metre-wide Union Jack flag) host the queen and the duke of Edinburgh. The department store is the oldest surviving one in the world still trading under its original name.

That civic pride has long faded. The 188-year-old institution is the closest it’s ever come to financial if not existential ruin, besieged by a world where shoppers delight in online same-day delivery, and bricks-and-mortar stores compete with global behemoths like Amazon and Temu. Many argue David Jones has a legacy worth saving – but no one seems to believe it can ever return to its former glory.

Founded in 1838 by Welsh merchant David Jones as high-quality fabric and drapery store, the retail outlet was the product of the era of mass production ushered in by the industrial revolution, and served as the heart of civic life and the economic engine of metropolitan cities, among hundreds of other independent stores.

“Department stores generally were very important culture centres and landmarks in Australia,” says retail historian and Macquarie University associate professor Matthew Bailey. “They were these grand ornate buildings, representative of their cultural and economic power.”

People dressed in their best and caught the train to town for a shopping trip to David Jones, which curated the fashion tastes of Australian women through buyers who travelled to Paris, London and New York. Six years before Queen Elizabeth’s visit, much newspaper ink was spilled on detailing various frocks by French designer Christian Dior when he presented his complete collection for the first time outside of Paris, planting Sydney – and David Jones – on the global fashion circuit.

“David Jones was always, in Sydney, the most upmarket department store,” says Bailey.

“In terms of selling taste in fashion, its connections to Europe and Britain, and to luxury goods and designers, it was the one that made an intensive effort to cultivate this sense of style and taste.”

Many milestones were marked by a visit to David Jones: a young lady’s first bra fitting or debutante ball, a young lad’s first two-piece suit, a bride’s bespoke wedding dress. Elaborate Christmas displays delighted children and parents alike.

Decades before customer loyalty meant signing up to programs and schemes, David Jones curried affection and allegiance with shoppers through customer service.

This is a heyday some still remember, but a new generation of shoppers have never experienced. Months of rumours about whether David Jones has a future – and if it will make it past Christmas – come after years of financial instability. It has struck a nerve with scores of Australians, who are calling the radio and swapping anecdotes of their favourite memories of the 188-year-old department store.

“I still have people stop me in the street to tell me their DJs story,” says Paul Zahra, who led David Jones between 2010 and 2014. He calls a “wonderful retired lady” who would visit the store’s once-famed food hall every day to do her grocery shopping. “She was head to toe in David Jones brands, with a full face of make-up and her hair bundled on top of her head,” Zahra says. “It was her place of belonging. It was an occasion, every day. To me, she was the David Jones customer.”

The beginning of the end

The David Jones that exists today is a shadow of what people once loved. The advent of the motor vehicle, suburban sprawl and local shopping centres meant people no longer had to visit the CBD to do their shopping. The expansion of women’s participation in the workforce in the 1970s meant higher wages – and higher labour costs. Over the next two decades, department stores were wiped out or absorbed by David Jones and Myer, leaving behind the duopoly that exists today, and without many of the services that made it so successful.

“Things you start to get rid of are very close and attentive customer service, building elaborate window displays, and so on because these things cost money and use labour,” says Bailey.

‘Department stores hold very strong memories of a business that seemed to care about its customers.’

Matthew Bailey, retail historian and Macquarie University associate professor

David Jones’ owners have treated it like an asset. The chain was owned and run by the founding Jones family for 142 years before being overtaken by corporate raider John Spalvins in 1980, and refloated on the ASX in 1995.

Under the helm of retail veteran Mark McInnes, who ran David Jones between 2003 and 2010, the department store firmly positioned itself in the luxury and premium end of the market through exclusive designer concessions and high margins.

In 2014, South African company Woolworths Holdings (no connection to the Australian supermarket business) purchased David Jones for $2.1 billion – and alienated their core customer base by trying to push private labels.

Over the next few years and in a bid to pay down debt, Woolworths Holdings sold key properties. The Market Street Men’s store in Sydney was sold for $360 million in 2016, Melbourne’s 299 Bourke Street Men’s store went for $121 million in 2020, and Sydney’s Elizabeth Street flagship was snapped up by Charter Hall for $510 million in a 20-year leaseback deal that created an immediate rental bill of $25.5 million a year.

By the time Sydney private equity firm Anchorage Capital Partners purchased it in December 2022 for between $100 million and $150 million, less than 7 per cent of what Woolworths Holdings paid, the world no longer needed department stores.

For the second time in four years, David Jones will need another rescue just in time for Christmas. Chief executive Erica Berchtold and Anchorage Capital partners who sit on the board of David Jones are scrambling to renegotiate deals with multiple landlords if it is to have a viable long-term future.

Even in the best-case scenario, David Jones’ footprint of 38 stores will be axed by more than half to about 12 to 15, according to people with knowledge of the matter, with 70 per cent of revenue being made by a third of its existing stores. At any point, British investor and distressed business lender Hilco has the right to call in receivers.

Berchtold, who joined Mosaic Brands as CEO for just over a year before it collapsed, has the unenviable task of trying to save another giant retailer from the brink. She declined to comment.

“Department stores often in people’s memories serve as a symbol of a simpler time, where economic relationships were not so transactional,” says Bailey.

Store staff used to know you by name and people would visit their local bank manager to get their loans approved. “Those personal relationships in commerce and with businesses and institutions have changed so fundamentally … A lot of people feel quite alienated in their economic activity.” Nowadays, we’re more likely to spend 45 minutes on the phone with insurance or battling to get out of endless subscriptions, Bailey adds.

“Department stores hold very strong memories of a business that seemed to care about its customers.”

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