Spotlight to offer Harris Scarfe lifeline, but uncertainty remains for stores and staff

Harris Scarfe

Prominent department store chain Harris Scarfe looks set to emerge from receivership, with the Spotlight Group ready to buy the collapsed business.

However, it is not yet clear how many Harris Scarfe stores will continue under the new owners, or how the sale will affect current employees.

Harris Scarfe collapsed into receivership in December amid an ongoing wave of Australian retailers falling over.

Receivers from Deloitte were appointed to the business only one month after it had been purchased by private equity outfit Allegro Funds.

Since collapsing, 22 of the company’s stores have closed, and approximately 500 employees have lost their jobs, according to the ABC.

Spotlight Group, which operates the Spotlight fabric stores, as well as outdoor retailers Mountain Designs and Anaconda, has now been given exclusive rights to buy the Harris Scarfe business.

Deloitte said on Tuesday four interested parties had been shortlisted for the sale.

The receivers said they expect to finalise the sale to Spotlight Group as early as mid-April and are working to secure ongoing employment for current Harris Scarfe employees.

“We are hopeful all of the 44 stores will be retained under the sale but ultimately, this will be dependent on the transaction progresses over the next couple of weeks,” receiver Vaughan Strawbridge said.

The news comes just one week after Jeanswest was sold back to the wealthy Hong Kong family that placed the chain into voluntary administration back in January, after closing 40 of its stores and cutting 31% of its original workforce.

Other high-profile retailers to fall on tough times in recent months include Ishka, Colette by Colette Hayman, Bardot and Curious Planet.

Also contributing to the sense of a so-called ‘retail apocalypse’ has been decisions by other retailers, including EB Games and Bose, to close multiple stores, and German hypermarket Kaufland’s shock exit from Australia.

Last week, veteran retailer Gerry Harvey said Australia should expect to see more retail brands collapse over coming months.

Speaking after the release of Harvey Norman’s latest results, Harvey said the next retailers to feel the pinch will likely include smaller businesses.

“The main ones have probably gone now, there will be more but they might be smaller ones, although I don’t know of any that are having a really big problem,” he said.

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