At least three David Jones stores in Perth are set to close after the retailer this week entered receivership, as a mixed picture emerges of the future of retail stores across the metropolitan area.
The Westfield Carousel, Garden City and the Karrinyup DJ stores are all likely to shut, according to investment analysis firm MST Marquee.
The fate of its CBD flagship is also uncertain, with landlord Starhill Global REIT's flagging a reduced footprint for DJ in the Hay Street Mall building or an entirely new tenant.
But the news comes in the same week Morley Galleria shopping centre reopened after a $240 million upgrade, banking on strong suburban retail demand.
The optimism of that investment stands in stark contrast to the reality for David Jones.
Uncertainty over Perth store
Starhill Global confirmed in an announcement to the Singapore Stock Exchange this week that David Jones in the city was $1.48 million behind in rent.
"It's troubling. It is troubling for everyone who is concerned," City of Perth Lord Mayor Bruce Reynolds said.
"There's uncertainty, we don't know what's happening, and ultimately, our thoughts are for those who are going into Christmas not knowing what's ahead."
Former employee John Flood said he felt sad for affected staffers.
"One of my first gigs as Santa Claus was at David Jones just up the road here and I loved it," he said.
"So it's a little sad I suppose. I feel, as well, for the staff and the people."
Starhill Global said it was considering whether to get a replacement tenant or open the building to multiple tenants, and reducing David Jones' floor area.
Hope for CBD retail
The company said it remained upbeat about the medium to long-term business outlook for the Perth CBD, though.
It pointed to "the opening of the Edith Cowan University City Campus in February 2026, continued population growth and supportive economic fundamentals in Western Australia".
But Lord Mayor Reynolds acknowledged in the short-term, it was challenging for the retail sector with many empty shopfronts in the city.
He was hopeful some of the more notable empty spaces would fill again.
"If you look at St Martin's Arcade, which has a lot of empty spaces at the moment, that has been closed and vacated for a quarter-of-a-billion-dollar investment," he said.
"And that will be re-imagined into a five-star hotel and new retail."
He said the Carillon site was still waiting for some "green shoots" to anchor tenants into that space.
"Once that happens, then you'll be looking at another hotel within the mall," he added.
"Vacancy after vacancy, we'll see that to start to return. That's going to take time and it's going to take investment.
"In the last four months alone we've had $800 million invested in the CBD area around people that do have confidence in the state of the future of the City of Perth," Lord Mayor Reynolds said.
At the same time, the state's peak business group stressed big retailers like David Jones played an important role in the business environment of a city or major suburban shopping centre.
"This attracts foot traffic and that supports smaller retailers so they can be competitive and they have the customers they require as well for their businesses to flourish," Chamber of Commerce and Industry (CCI) chief economist Dr Daniel Kiely said.
Besides the impact of online shopping, David Jones customers had their own views on why the 188-year-old business was in so much trouble.
Paul Loiterton is the owner of a coffee shop on Bayview Terrace across the road from Claremont Quarter, which houses David Jones, and said its business model was "outdated".
"Take Claremont, for example, every concession in David Jones also has a store in this shopping centre. Why are they doubling up?" he said.
Dannielle Tilly said she did not have a good experience in the store.
"I just think, as I work in customer service, you'd have to know your product," she said.
"I just don't think they have enough staff that know the details of the store."
Trading hours debate
The CCI also put it down to what it called "some of the most restrictive trading hours across the nation".
It again called for trading hours to be extended on Sundays and public holidays.
Lord Mayor Reynolds said there should be "a national urgent conversation around the future of retail".
"I've been in business for 30 years and I can tell you from that experience it's never been harder to run a business than it is at the moment," he said.
"So what we can do in order to make people have the opportunity to become more profitable from an organisational and a countrywide point of view, they're conversations that are urgently needed."
