A quiet move by financiers, unnoticed by customers, threatens to strip shelves at Myer and DJs, stoking concerns about the stores’ ongoing viability.
A financial safety net was quietly being pulled from under the feet of suppliers to it and rival David Jones which had the potential to see shelves and racks emptied of stock and has some commentators contemplating if the move brings into question both firms’ ongoing viability.
Both Myer and DJs say they are well able to pay their suppliers. David Jones told news.com.au insurers were taking too broad a view of the retail sector and had failed to “gain a direct understanding of our position”. Last month, it emerged that local insurance heavyweight QBE would no longer provide trade credit insurance to suppliers to Myer and DJs.Insurer QBE was the first firm to remove payment cover from suppliers. Picture: Ian Waldie/BloombergIt’s since been reported four other big insurers have followed suit, removing some or all trade credit cover.
David Jones has just spent $220 million sprucing up its Sydney CBD store which reopened just as lockdowns began. “Department stores were already facing multiple challenges; now with the impacts of the pandemic it is becoming quite dire. All of these factors have coalesced into a perfect storm for Myer and David Jones” she told news.com.au.
“We have not changed payment terms during COVID-19 and have and will continue to pay our suppliers according to agreed terms.”Source:News Corp Australia
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