David Jones was months behind in payments to some small Australian brands before going into administration, suppliers say

David Jones was months behind in payments to some small Australian brands before going into administration, suppliers say Global luxury fashion houses clear their stock from the embattled retailer, but smaller local businesses are at the bottom of the creditor pile

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In April, half of a 40ft shipping container loaded with premium water bottles, coffee tumblers, wine coolers, Eskies and other drinkware was dispatched to David Jones’s flagship stores, marking a major achievement for fledgling Australian brand Beysis.

For co-founders Ariana Hendry and Jessica Bryce, the restock worth tens of thousands of dollars showed how well the products were selling at Australia’s premier upmarket department store.

To keep cashflow moving, the Sydney-based small business agreed to a substantial price cut on the goods in return for 14-day payment terms.

“The most frustrating part was the lack of communication,” says Hendry.

“I started trying to escalate it further up the chain, but it was just crickets, basically, to the point that about six weeks ago, I knew the writing was on the wall.”

Beysis is one of many small suppliers left out in the cold by David Jones’s slide into administration. It is stuck near the bottom of the creditor pile and unlikely to recoup its debt.

A similar experience faced other suppliers contacted by Guardian Australia, raising questions about just when the 188-year-old department store ran into cashflow trouble, before missed rent payments to Westfield owner Scentre Group triggered its fall into administration on Thursday.

Under a dual appointment, receivers FTI Consulting has taken day-to-day control of operations, while administrator McGrathNicol seeks a buyer or a fresh injection of capital.

Out-of-pocket suppliers now face tough choices about whether to keep sending stock to DJs, after receiving a letter asking if they would continue supplying during the administration.

For Jacob Leung, co-founder of Slowdown Studio, known for its artist-designed woven blankets, the fallout has been costly.

Leung sent a dispatch to David Jones’s major city stores a few weeks ago, and an invoice for almost $75,000.

The retailer was meant to pay Slowdown Studio on Monday, but the money never arrived.

“Maybe we’ll get some back, but it would be cents in the dollar,” says Leung.

“I would sell to them again, but I would definitely be changing the terms such as being paid before delivery, which a lot of the bigger brands can do.