Department chain Harris Scarfe has become the latest victim of Australia’s lacklustre retail sector, going into voluntary administration on Wednesday.
Harris Scarfe sells bed linen, kitchenware, homewares, electrical appliances, and apparel from 66 outlets across Australia, but is best known in Victoria, South Australia and Tasmania.
The retailer employs more than 1800 staff, and has annual sales totalling $380 million.
Wednesday’s announcement came just a month after Harris Scarfe was acquired by private equity firm Allego Funds. Deloitte Restructuring Services has been appointed as receiver and BDO as voluntary administrators.
“Harris Scarfe is a long-standing retail institution,” Deloitte Restructuring Services 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.”
Harris Scarfe will trade as normal over the Christmas period; staff will be paid by the receivers.
Deloitte said it was confident the chain had sufficient assets to meet employee entitlements. It intended to sell the business as a going-concern while preserving as many jobs as possible.
Gift cards and lay-by deposits would be honoured, it said.
The SDA, the union that represents Harris Scarfe employees, said it was concerned at the announcement. It would file a dispute with the Fair Work Commission over the company’s failure to consult with the union, national secretary Gerard Dwyer said.
“This announcement has come without warning and employees are shocked and will be very concerned as they head into Christmas,” he said.
“Just as importantly, SDA is seeking urgent consultations with the receivers to guarantee that there are in fact sufficient funds … to meet the legal entitlements of all employees.”
Just a month ago, Deloitte warned that 2019 had been tough for Australian retailers – and the festive season was likely to offer little improvement.
“Weak wage growth, high debt levels and increasing price pressures are hurting demand, while tax returns and interest rate cuts have yet to fully come through,” it said in its November 2019 retail forecast.
“There is some positive news, with 2020 holding more promise.”
Harris Scarfe was founded in South Australia in 1849 as Lanyon and Harris.