Crunch time for slimmed-down Harris Scarfe, Colette chains
A critical 10 days are ahead for slimmed-down department store chain Harris Scarfe after the deadline closed for rescue bids from would-be buyers. Now it’s make-or-break time.
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The fate of ailing retail chain Harris Scarfe is likely to be decided within two weeks as the sale process arrives at a make-or-break point.
And one in every four stores at another retailer, fashion house Colette by Colette Hayman, is shutting down as administrators seek a buyer for a slimmed-down chain.
Receivers for department store group Harris Scarfe have revealed they will spend coming days assessing final offers and working with prospective buyers short-listed as part of the sales process.
The deadline for takeover offers for Harris Scarfe was previously Friday last week, but Deloitte Restructuring Services pushed it back to the close of business today “to accommodate the level of due diligence that has been undertaken”.
Deloitte is yet to reveal how many offers were tabled by the deadline.
In a statement, it said receivers now expected to spend the next 10 days assessing the offers and working with short-listed bidders to address remaining issues.
The receivers would work with prospective buyers “with a view to agreeing a sale/recapitalisation deal which will see Harris Scarfe emerge from administration”, Deloitte said in a statement.
It said 21 Harris Scarfe stores had been closed, as flagged early last month, affecting 401 employees.
Most of them had been redeployed, found jobs elsewhere or were actively applying for roles, Deloitte said.
Partner Vaughan Strawbridge, one of the receivers, said in a statement that all staff had received their wages and entitlements in full.
“The Harris Scarfe team have excelled in supporting staff to find new employment and is very grateful to the other retailers who have actively supported the process to find employment for the staff impacted,” he said.
“We could not have hoped for any better support from everyone in the business, the stores look great and they present the business exceptionally well and the management team have done a great job during the sale process.
“Also, both landlords and suppliers have continued to provide strong support for the business.”
Harris Scarfe was put into administration and receivership on December 11, soon after private equity house Allegro Funds bought the business.
As the pall over the retail sector intensifies, Deloitte, which is the administrator for Colette, has also announced today that 31 loss-making stores in that chain will close across Australia and another two will go in New Zealand.
Eight outlets will be shut in Victoria — six of them in Melbourne, along with stores in Bendigo and Mildura.
The shops will close over the next three weeks (see the full list below).
Deloitte said 105 stores would remain open for now in Australia and New Zealand. They will form the portfolio of Colette stores offered for sale. It comes after retailer’s parent company, CBCH, was put in voluntary administration on January 31.
The Colette store closures come at taxing time for the Australian retail sector amid a series of high-profile collapses.
Jeanswest, Bardot and Curious Planet, previously called Australian Geographic, have also fallen into administration or announced sweeping restructures in recent months.
Home furnishing specialist Ishka joined the list this week, calling in insolvency specialist Cor Cordis as administrator.
Adding to the pressure on the industry, David Jones and shopping centre heavyweight Vicinity Centres this week warned customer numbers were down at some sites as a result of the hit to tourism caused by the coronavirus outbreak.
Vicinity Centres owns scores of shopping centres around Australia and half stakes in Chadstone and Emporium Melbourne.
Mr Strawbridge said administrators had taken into consideration “a number of factors” before deciding to close Colette stores, but regrettably had to act.
“This is never easy,” Mr Strawbridge said.
“We are working closely with the Colette management team to effect the closures quickly while seeking to redeploy staff impacted.
Colette, founded a decade ago by designer Colette Hayman, has a staff of about 300 in Australia.
Administrators said it was too soon today to know how many jobs would be affected by the store closures, but the ratio of shops closing to those that will continue trading suggests about 75 jobs will go.
Mr Strawbridge said “all efforts” were being made to redeploy staff affected by store closures. “All staff impacted are expected to receive all their wages and entitlements in full,” he said.
Deloitte has called for prospective buyers of the chain to lodge initial expressions of interest in the chain, which operates out of a head office in northern Sydney.
Expressions of interest were due early next week and there had already been “strong interest”, it said.
Customers and staff were supporting the brand, Deloitte said, “demonstrating the value of the business”.
“Closing the 33 loss-making stores will position us with improved group performance and time to find a recapitalisation or sale of business solution for the business.”
The Melbourne stores closing are in Cranbourne, Greensborough and Moonee Ponds, and at The District Docklands, Westfield Doncaster and Spencer Outlet Centre at Southern Cross Station.
Queensland is the state hardest hit by the closures, with 10 stores to go, while six will be shut in New South Wales and five in Western Australia.
THE COLETTE STORES CLOSING
VICTORIA
Bendigo
Cranbourne
Docklands
Doncaster
Greensborough
Mildura
Moonee Ponds
Spencer Outlet Centre (CBD)
NEW SOUTH WALES
Chatswood
Hornsby
Kotara
DFO Birkenhead
Rhodes Waterside
Warriewood
QUEENSLAND
Australia Fair (Gold Coast)
Coomera
DFO Cairns
Kawana
Logan
Mackay
Noosa
Mt Ommaney
Rockhampton
Queen St (Brisbane CBD)
WESTERN AUSTRALIA
Belmont
DFO Watertown
Hay Street
Mandurah Forum
Ocean Keys
SOUTH AUSTRALIA
Rundle Mall (CBD)
ACT
Belconnen
NEW ZEALAND
Albany
New Plymouth