Australian department store Harris Scarfe has been placed into receivership just months after being purchased by private equity firm Allegro Funds.
Vaughan Strawbridge, Kathryn Evans and Tim Norman of Deloitte Restructuring Services were on Wednesday appointed as receivers of DS OpCo Pty Ltd, which trades as Harris Scarfe.
Separately, Andrew Sallway and Duncan Clubb of BDO Australia were also on Wednesday appointed as voluntary administrators of the company.
One of Australia’s oldest retail brands, Harris Scarfe was founded in 1849 by George Peter Harris and John C Lanyon, who opened their first store in Adelaide, South Australia.
Today, the business has 66 stores across Australia and employs over 1,800 staff, booking annual sales of $380 million last year.
In a statement circulated Wednesday afternoon, Strawbridge said Harris Scarfe will continue to trade “as normal” over the coming Christmas period, with staff to be paid by the receivers.
Gift cards and lay-buy deposits will be honoured in full, Deloitte receivers said.
“Harris Scarfe is a longstanding retail institution. We will be making every effort to secure a future for the business and intend to commence an immediate sale of business process,” Strawbridge said.
It is understood there are currently no plans to close stores ahead of a possible sale of the business as a going concern.
BDO administrators were unable to provide additional detail about a forthcoming creditors meeting on Wednesday afternoon.
Harris Scarfe has changed hands multiple times over its long history, sold first in the early-1970s before eventually being bought by Pepkor, which was then purchased by Steinhoff International in a $6.7 billion deal back in 2014.
Steinhoff, which has been dealing with the fallout from an international accounting scandal in recent years, sold Harris Scarfe and Best & Less to Australian-based Allegro Funds in November for an undisclosed sum.
The department store has been struggling financially for some time amid broader disruption to the category that has seen competitors such as Myer and David Jones write hundreds of millions of dollars off their books.
University of Tasmania retail expert Louise Grimmer says Harris Scarfe is another case of a once successful retail brand falling victim to the “bland land curse”.
“Bland land is that middle area of retailing — at one end is Kmart, Big W and Target and at the other DJs and Myer and those retailers stuck in the middle are really suffering,” Grimmer tells SmartCompany.
“This is another retailer stuck in the middle and stuck in an endless cycle of discounting.
“Harris Scarfe customers came to expect that products would always be on sale and this a position that is just not sustainable in the long term.”
Harris Scarfe is just the latest high-profile retailer to collapse in Australia over the past 12 months, following in the footsteps of The Co-op bookshop, Ed Harry, Napoleon Perdis, Bardot, Dimmeys, Roger David, Karen Millen, Focus Group, and others.
Allegro Funds has been contacted for comment.
This story was updated at 4.40pm on December 11, 2019.