Harris Scarfe retail chain sales rise as potential bidders check out numbers

The retail chain has closed about a third of its network, but four bidders are showing serious interest in keeping the business open.

Collapsed department store chain Harris Scarfe has experienced a rise in sales over the Christmas, New Year period

Collapsed department store Harris Scarfe has experienced a bump to its Christmas and New Year sales as four potential bidders continue to wade through financial documents in a data room as they prepare to make final bids to rescue the business from voluntary administration.

Such is the interest in the slimmed down Harris Scarfe chain, which has shut down about a third of its national store network since it lurched into administration two weeks before Christmas, that the voluntary administrator is considering pushing back the February 14 deadline when final bids need to be lodged.

Deloitte Restructuring Services opened discussions with more than 20 interested buyers in following the failure of the department store shortly before Christmas and spent the new year narrowing that down to four bidders now showing serious interest.

Deloitte Restructuring partners Vaughan Strawbridge, Kathryn Evans and Tim Norman were working to a February 14 deadline for final bids, but the bidders have been requesting further information and to give them more flexibility — and create an environment conducive to generating the strongest offers — the administrators are considering pushing back the deadline.

“We are running very hard with those four parties (bidders) and that process is running well and we are happy with that,” Mr Strawbridge said.

“We are working with those parties as they have queries in the data room, so we are still looking for the 14th (for final bids) but I think in reality we might need more time.

“There is a lot of activity and I think for people to put in the best offers they can, final offers, I think they probably will need extra time and we are working through that.’’

Since being appointed as voluntary administrator Deloitte has shut down 20 stores out of its national network of 66 stores — the 21st store will close soon — with some related job losses, although 50 Harris Scarfe employees who lost their jobs were found other roles within the retailer.

There has also been a rise in the department store’s performance over December and January.

“Trading has been very good, there has been significantly higher sales than last year and customers have definitely come out in force to support the business,’’ Mr Strawbridge said.

If Harris Scarfe finds a new owner it will be the second time it has returned from the dead. It was placed in receivership in 2001 owing $93m to unsecured creditors and $50m in company debt.

More recently Harris Scarfe was restructured and owned by Steinhoff International, itself a teetering international retailer with its own financial woes.

Steinhoff, which changed its name to Greenlit Brands, sold off Harris Scarfe as well as Best & Less and women’s fashion chain Postie to private equity firm Allegro Funds only nine days before Allegro put Harris Scarfe into voluntary administration and later receivership.