Luxury fashion retailer collapses owing $16m

The retailer had been in operation for 39 years with outstanding debt owed to some big fashion names.

An Australian luxury fashion retailer, which spruiked celebrities visiting its store and stocked some of the world’s most famous designers, has collapsed owing $16 million.

After nearly 40 years of operation Harrolds was quietly placed into liquidation at the start of October.

The company was founded in 1985 with its first store opened in Melbourne and was the Australian home of fashion brands from the likes of Tom Ford to Saint Laurent and Balmain to Burberry.

It was a family owned business and Australia’s only privately owned luxury department store and at one stage had stores in Melbourne, Sydney and the Gold Coast.

In March its Melbourne site had some famous guest visit too with Nick and Kevin Jonas captured in store.

Luxury fashion retailer Harrolds has collapsed. Picture: Facebook

Harrolds also launched online in 2020 marketing itself as offering sought-after collections from more than 100 of the finest design houses in the world.

But it has all come undone for the company with the firm SMB Advisory being appointed as liquidators on October 3.

There are almost 90 creditors owed more than $16 million with some big names on the list, according to an initial document provided to creditors by the liquidators and filed with ASIC.

These include Victoria Beckham’s company which is owed $30,000, two of Tom Ford’s companies listed with debts combined of $33,000 and American designer Thom Browne with a noted debt of $253,000.

There’s also Versace debt of just over $1000 and $853 owed to Stella McCartney.

Company founder Ross Poulakis said it was with “deep regret” and a “difficult decision” to put the luxury retailer into liquidation.

He said the decision comes after significant efforts to navigate the post-covid retail landscape, which has presented unprecedented challenges for businesses across the sector.

“Despite our best efforts to adapt to the evolving economic environment, a combination of reduced luxury spending, decreased foot traffic, unprecedentedly high levels of CBD office vacancies and extremely unfavourable government policies has significantly impacted our ability to sustain operations,” he said.

“Unfortunatley the retail sector in the Australia has been hit hard and like many other retailers before us in this period we have had to close our doors.”

Luxury fashion retailer Harrolds had operated for nearly 40 years. Picture: Facebook

Employees are owed more than $190,000 in entitlements from Harrolds, while menswear designer Feng Chen Wang has an outstanding debt of close to $35,000, Italian shoe brand Mach & Mach has a bill of $67,000 and another Italian luxury brand Raffaele Curso is owed $133,000.

The ATO is also listed as being owed more than $2.3 million, according to the ASIC document.

Four companies associated with Harrolds have gone under including Harrolds Logistics Pty Ltd, JTP Sydney Pty Ltd, Harrolds Femme Pty Ltd, and Nelson River International Pty Ltd.

It comes after Harrolds announced in July it was shuttering its stores in Sydney and Melbourne as part of an ongoing transformation plan.

It said it was moving into Westfield’s new development on Market St in Sydney and a new immersive store experience would be announced for Melbourne.

At the time, Harrolds said it marked a “new chapter” for the retailer. News.com.au has contacted Westfield for comment.

Its Melbourne and Sydney stores had closed as part of a new chapter. Picture: Facebook

SMB Advisory said at present, unrelated creditor claims against the four companies total approximately $12.5 million.

“SMB Advisory urges former employees to contact its Melbourne office to discuss how to lodge a claim for outstanding entitlements they believe they are owed,” they said.

“SMB Advisory will report to creditors in due course as to the progress of the winding up and

advise of the estimated return to creditors.”

Harrolds also announced in July it was closing its online store temporarily in July. The retailer’s website is still active with a banner running announcing “a new chapter”.

In June, it was also reported that the owners of Harrolds were selling an old Victoria University CBD campus which was originally purchased for $34.2 million.

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