BREAKING NEWS: Big Retailer Calls In The Administrators
Another iconic retailer has bitten the dust with South Australian retailer Harris Scarfe which is owned by Grenlit Brands placing themselves into voluntary administration after several manufacturers placed them on credit hold.
The retailer has stores in Victoria Tasmania and SA and employs over 1,700 staff.TYhis is not the first time that the retailer has had problems.
Earlier today Deloitte Restructuring Services (DRS) were appointed as administrators with the $380 million chain falling victim to the sector’s tough operating conditions.
Deloitte Restructuring Services partners Vaughan Strawbridge, Kathryn Evans and Tim Norman were appointed receivers and managers over Harris Scarfe by a secured lender on Wednesday following the appointment of Andrew Sallway and Duncan Clubb of BDO as voluntary administrators earlier in the day.
According to DRS trading will continue as normal over the Christmas period and employees will be paid by the receivers, says the appointed administrators Deloitte Restructuring Services (DRS).
“Harris Scarfe is a longstanding retail institution,” DRS partner Vaughan Strawbridge said.
“We will be making every effort to secure a future for the business and intend to commence an immediate sale of business process.”
The Company that has a major house brand operation is believed to be carrying millions in slow selling electrical goods and appliances. Many of their electrical goods are house brands which the Company is carrying a risk on.
The department store chain also sells a wide variety kitchenware, homewares, electrical appliances, and accessories.
Queensland University of Technology retail expert Dr Gary Mortimer told News Corporation that he believed it was only a matter of time before a big name in the sector was forced to pull up stumps.
“This is another example of being stuck in the middle,” he told news.com.au.
“At one end of the market we’ve got cheap and cheerful with Kmart still going strong and a revitalised Big W.
“And at the other end there’s David Jones and Myer which is still struggling to find form” he said.
Dr Mortimer said the closure of Harris Scarfe will send a shiver down the spines of rivals David Jones and Myer, with the end of the high-end department store networks imminent.
The company ran into trouble during the late 1990s due to rising debts and management issues. In 2001, the business – which had been controlled by the Trescowthick family for years – was placed in receivership. It owed creditors about $200 million. The situation surrounding the collapse was controversial – receivers discovered assets had been valued in order to hide losses. Shares were withdrawn from trading on the ASX.
- In 2002, the company started a revitalisation program. The store network was remodelled with new products, layouts and new branding. As a result, Harris Scarfe soon began to enjoy record growth. By 2007, Sydney-based Momentum Private Equity acquired an $80 million majority stake in the company. During 2012, Momentum Corporate ten sold the business to Pepkor, a South African private equity firm.As of 2014, Greenlit Brands formerly Steinhoff, acquired Pepkor and this included Harris Scarfe. Harris Scarfe has been owned by Greenlit Brands since this time.